CONTENTS
Thursday 16 February 1995
Pre-budget consultations
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/
Prince Edward-Lennox-Hastings-Sud ND)
*Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)
*Abel, Donald (Wentworth North/-Nord ND)
*Caplan, Elinor (Oriole L)
*Carr, Gary (Oakville South/-Sud PC)
*Haslam, Karen (Perth ND)
Jamison, Norm (Norfolk ND)
*Johnson, David (Don Mills PC)
*Kwinter, Monte (Wilson Heights L)
Lessard, Wayne (Windsor-Walkerville ND)
*Phillips, Gerry (Scarborough-Agincourt L)
*Sutherland, Kimble (Oxford ND)
*In attendance / présents
Substitutions present/ Membres remplaçants présents:
O'Connor, Larry (Durham-York ND) for Mr Lessard
Wessenger, Paul (Simcoe Centre ND) for Mr Jamison
Clerk pro tem / Greffière par intérim: Grannum, Tonia
Staff / Personnel: Campbell, Elaine, research officer, Legislative Research Service
The committee met at 1005 in room 151.
PRE-BUDGET CONSULTATIONS
The Chair (Mr Paul R. Johnson): Committee members, the first thing I bring to your attention is that I believe you all have before you now a submission to the committee by Dialysis Management Clinics Inc.
The first order of business I'd like to deal with is, I would like to know if the committee members feel that it's necessary -- I suspect not -- that this portion of our deliberations be televised. We would like to have it recorded in Hansard, no doubt.
Mr Gary Carr (Oakville South): My mom likes to watch me.
Mrs Karen Haslam (Perth): Yes, but we don't and we have to.
Mr Carr: You're going to hear me anyways.
Mrs Haslam: Give us a break, eh?
Mr David Johnson (Don Mills): Are you talking about today, whether today is televised or not?
The Chair: And the rest of the deliberations till we conclude.
Mr David Johnson: So is it not on the television at this point?
The Chair: It is, right as we speak.
Mr Carr: My mom would be turned off.
Mr David Johnson: What would be the point in taking it off?
Mrs Haslam: Could I say something to Gary's mother? We're sorry, but we really would like to not publicize this part of the proceedings. Bye.
The Chair: Just to clarify this for Mr Johnson, this would be recorded in Hansard; there's no doubt about that. But we haven't usually done this section of our hearings in camera, or on camera. On television, I should say, not in camera, which means something else.
Mr David Johnson: This is my first time through this sort of session, Mr Chair, so you'll have to bear with me, but I still don't quite understand the point of not televising it. If people are interested in watching it, and I can tell you that I've run into people over the last couple of weeks who would have --
The Chair: It would save a lot of money, I suspect.
Mr David Johnson: What would be put in its place? Is there a rerun of something?
Mr Carr: A blank screen.
The Chair: Yes. There wouldn't be anything in its place.
Mr Carr: Which may be more informative.
The Chair: However, this will be still be recorded on Hansard and the public will still have access to all that takes place.
Mr David Johnson: I would suggest that it continue to be televised discussions.
The Chair: We may have to vote on this.
Mr Carr: I kiddingly referred to my mother. I think the public may or may not be interested, but I think the opportunity would be there. I think it's something that hasn't been done, but they may be interested in the report writing. I think, not particularly today but when we get down to the specifics in the last three days, when we get into the discussion of what will be in the report and why we feel the way we do, the public would like to hear that and we should give them the option.
Having said that, one thing I did want to point out, with you saying it would be cheaper: Is there a cost to televising it or is the staff still there anyway? Are you just saying that or do you have any hard data on the financial costs?
The Chair: I must admit I don't have any hard data, but I would presume that whenever the function of recording on video and televising takes place, there must be a cost associated with that which isn't incurred when it isn't taking place.
Mr Carr: The people are still here; they still have to be paid. We're still here.
The Chair: But the cameras aren't rolling and the film isn't being used. I mean, there's got to be some savings. How significant, I wouldn't know for sure.
Mr Carr: I think also in what we're going to put into the report, the recording of what the people heard, they'd like to know how the final report gets put together. We hear the deputations come in and then the final report comes out. I think the public would be interested in doing that. I disagree; I don't think there is an increased cost.
My final point: Any of the members on the committee who are going to vote against it, because I take it we'll probably have a vote, I'd like to hear the reasons they don't want to have the public see what we're doing in writing a report. If there's a logical reason and they can convince me, then I may change my mind, but I don't see it right now and, in conclusion, I think we should have it recorded.
The Chair: The Chair is certainly in the hands of the committee with respect to this.
Mr Gerry Phillips (Scarborough-Agincourt): Even though this is a fairly painful process and maybe not particularly compelling television, I think it's worth continuing to televise it. I think the viewers probably appreciate that we're dealing with a lot of detail now and, as I say, it may not be the most interesting thing, but generally speaking, I think we should do all of our business in as public a way as we possibly can, except when we're dealing with matters of personnel or where someone can benefit from the knowledge, so the more open we are the better.
Mr Kimble Sutherland (Oxford): I feel like we're all being a bunch of lawyers here deciding whether cameras should be in the courtroom, even though other folks can be here. Whether we have it on the TV station, it's still being recorded in Hansard, so it still is all a public process. The cameras and the provincial network give us an opportunity to share with more people and, as long as we're not worried about those ratings going down substantially due to the somewhat dull nature of what the process will be, it doesn't really matter because people can access the Hansard. What we say and what we do is all going to be public knowledge, so I guess it's not a major problem.
The Chair: Very good. I think I've understood the committee members and they would like to have this televised, so we'll continue with that.
Mr David Johnson: That's fine. I'm glad to hear the government taking that approach. There were 3,500 people last night at the Metro East Trade Centre attempting to become involved and aware and knowledgeable about the federal budget process and having their input. I just think that with a budget of some $55 billion, counting crown corporations and capital expenditures and operating expenses, although this may be a little bit dull still it's very important to the people of Ontario and I'm sure that many will wish to have this kind of information.
The Chair: I accept that it's the wish of the committee members. I just remind everyone that we haven't televised this previously during these sessions, but this is a first and that's good. I hope no one's expecting an ACTRA as a result of the ensuing deliberations, however.
Mr Sutherland: We just hope people will keep watching, period, Mr Chair.
The Chair: That brings us to the part of our deliberations that are maybe not as straightforward and a little more painful as we try to come to some consensus with respect to how we want the report drafted. The Chair is now again in the hands of the committee with respect to that and seeking advice from any members with respect to how they would like to proceed.
Mr Carr: My question might be to our researcher, Elaine, who we all know has done a great job over the past few years and has been terrific in putting together reports. I'm just wondering if Elaine had any concerns. I know she put together a couple of pages of questions she would like answered, but maybe we could start off with some of her suggestions and some guidance and then we can maybe answer some of her questions, yes or no, to what we've done in the past.
The Chair: I'll turn the cameras over to Ms Campbell and she'll take us through page by page what we have at this point in time with respect to writing a report.
Ms Elaine Campbell: As Mr Carr noted, you were provided with a proposed report outline yesterday for the pre-budget consultations 1995 and, as the memo informed you, there were some points and questions in italics throughout the outline for your consideration.
I'd like to also draw your attention to the summary of recommendations that was handed out yesterday as well. That contained the recommendations that were made to the committee last week, from Tuesday to Thursday. It did not include any of the recommendations from this week, but the headings and subheadings that appear in the table of contents of the summary would apply to this week for the most part as well.
The first page is the introduction. It's a fairly standard introduction as has appeared in the reports. There were two questions, though. The first was, "Would the members like a paragraph following the opening to make reference to some of the themes that served as context for the presentations?" The second was, "Would the members like a reordering of the references to witnesses in the second paragraph?"
The Chair: Are there any answers with respect to those questions?
Mrs Haslam: One of the themes that I kept hearing was the future: the future when you look at the education system, the post-secondary system, the disabled, multiculturalism. I just throw it out.
The other theme that I heard, especially in the MUSH sector, was that everybody came and said, "We're underfunded." I wondered if that was something we should look at, since I kept hearing that over and over again also. Everybody said, "We need $17 million to bring up to bare bones. We've been underfunded in the past. This is what we need now," and there were many different groups that came before us with that same theme also.
Mr Carr: From my standpoint, just the table of contents order is fine with me -- "Economic and Fiscal Policies," "Sectoral Issues," "Social Issues," "Transfer Recipients" -- and I think the way the outline was done is fine with me.
Mr Monte Kwinter (Wilson Heights): On the first question raised, "Would the members like a paragraph following the opening to make reference to some of the themes that served as context for the presentations?" I have no problem with the ones that are mentioned. Another one that could be added, and I think it was an overriding theme throughout nearly every single presentation, is the growth in the economy, but also the projections in the short and long term. I think that had a great deal to do with the context of the presentations and there should be some reference to that.
Mr Phillips: I think we do need a paragraph and I just rely on the research people to kind of pull that together. On the reordering of references to witnesses in the second paragraph, it doesn't really matter to me and I'm not even sure why that's there, but if somebody feels sensitive about the ordering of it, I have no problem one way or the other. It's just not relevant. But the first one is very relevant.
Mr David Johnson: There was some discussion about some of the assumptions, and I'm not sure if that would come at the very beginning or under "Economic Summaries and Forecasts." We have the growth recommendations or the growth forecasts for the next four years, as I recall, in the minister's submission, and I assume that would be one of the charts that would be in.
What I am having difficulty finding are the revenue forecasts associated with those same four years. I don't know if they're available or not, but if they are, I think that kind of information would be excellent to have up front, and then further detail on that, if possible, like how much would be associated with new taxation and how much would be associated with the straight economic growth over a four-year period.
Ms Campbell: I think, Mr Johnson, we would be discussing a number of those issues under the next heading, "Economic Summaries and Forecasts."
Mr David Johnson: I wasn't sure. If that does come in there, that would be helpful.
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Mr Carr: I agree with both Monte and David in the answer to the first question, what Elaine has put there about the Canadian dollar and the Quebec referendum. I also agree with the growth rates that Monte mentioned, as well as David, with the revenue.
With regard to the second question about the reordering -- and I don't know if this can be done and I'm asking this, I guess, to Elaine -- when I look through it, I look by subject matter. One of the problems I had as I looked at it was that if you want to get what AMO said in total you can't do that. You have to look under specifically the topics they put up. Is it too difficult to make reference under the alphabetical listing of, say, AMO in the back, that you record the pages where they are referred to, so that if you would look up AMO it would have page 3, 4, 8, 10 or whatever? Is that too difficult? Does that get into something unworkable?
The reason I'm asking that is that people who want to read the report, who want to hear what AMO had to say, or the OHA, can't hear everything that they talked about. They have to look it up by subject matter rather than by deputation. Can that be done easily, without creating too much work for you?
Ms Campbell: The summary that was handed out yesterday is only for those presentations made last week. AMO appeared this week and there would be a discussion of what they told the committee under the heading of municipalities, under "Transfer Recipients." It will be there.
Mr Carr: Oh, I assumed we were going to catch up. I know the report that you gave us only had to the 9th. I assumed that it was just a matter of time that we were going to continue on with the same theme and include everyone. You're saying now that AMO won't be --
Ms Campbell: It won't be listed separately, but if you're agreeable to the headings as they appear in the table of contents, under "Transfer Recipients" we've got the MUSH sector, municipalities, universities, schools and hospitals. But perhaps that point could be raised again when we get to that section of the outline.
Mr Carr: I guess what I meant is in the back, the listings which are alphabetical by the abbreviations. You've got witnesses' date of appearances. I'm just wondering if for any reference they have into the document, you could have the page number that they are referenced, or is that going to be too difficult?
Ms Campbell: You mean an index?
Mr Carr: I used the wrong example, I guess, maybe with AMO, but the first one, the Association of Canadian Distillers, what I'd like to see, if you look at the back, is abbreviation, the organization, the date of appearance, and then the page numbers that they appear in the document, any reference. Can that be done?
Ms Campbell: The list of witnesses that accompanies the summary of recommendations is a standard form that we prepare in conjunction with the summary of recommendations. It doesn't necessarily appear in the report as an index of who the witnesses before the committee were. I think it was discussed yesterday that the final summary would be prepared, and if anyone was interested in receiving a copy of it, there would be some mention in the report about its availability through the clerk's office.
The Chair: Can I be helpful here? I think what Mr Carr is asking for is, he'd like individuals who are looking at this report to be able to flip to the back and see AMO and then an indication of where they might find what they stated in the document so that they could make a reference. What he's asking is, is that going to unduly overtax you or create too much work for you to do with respect to that?
Ms Campbell: I think it's a possibility, but it would take considerably more time than I think we have available at the moment.
Mr Kwinter: We've been asked further along, in both the sectoral issues and the social issues, whether or not we want to have each issue discussed separately or whether we want to have them merged to focus on the points of commonality of a general overview. Until we make that decision, then Mr Carr's suggestion is of no value, because we haven't made that decision. If I could just talk to that point right now, I'd like to.
The concern I have is that we have had two weeks of public hearings and we've had many groups appear before us. We've also had many groups that haven't appeared before us. If we single out just the groups that appeared before us and make it appear that this is the sole concern of this committee's efforts, it may appear to other people who did not appear before us that they are of no importance and that they don't have a role to play in this.
So I, for one, would be pushing for a more common and general overview of the thrust of what everybody has been saying as opposed to quoting every single person in the report, because again, as I say, that may give the impression to many people who did not appear before this committee that they're of no consequence. I feel that is something we should discuss and make a decision on.
The Chair: Thank you, Mr Kwinter. I think that raises a very valid point. The Chair appreciates that because the Chair has indicated to many people who had a desire to be a public witness before this committee that, given the time constraints, their written submissions were of equal importance with respect to the drafting of our report, and I wouldn't want anyone to think otherwise. You're right.
What Mr Carr suggested -- and he's going to respond to this shortly -- might suggest that, and I wouldn't want to leave anyone with that impression. Ms Campbell has indicated that time constraints probably don't allow the kind of indexing that Mr Carr has asked for.
Mr Carr: I appreciate that. If you look at the work Elaine's done, she'll take a topic, there is a consensus, and what she's done is she's put the groups that have given that consensus with their three-digit letters for abbreviations. What that is is very powerful, because what it shows isn't the fact that the politicians sitting around the table have come to this consensus -- and I should use a couple of examples here -- what it shows is the groups that have come to the consensus, and there's a couple where three or four people have talked along the same lines.
Having said that, I appreciate that would be too much work. I also appreciate the amount of work we put even in the minority reports is a great deal, so we do not want to tax her.
I think what we can do, to be helpful, is maybe get a consensus not only of the groups that appeared for us, but I think there are some things that we can get a consensus, believe it or not, in here on some of these issues that should be put in the report, and then the things that we can't we can maybe debate later on, and then I suspect we will be coming up with a minority report.
If it's helpful, what I think we can do today is maybe come to agreement on the consensus we heard from the public and the things all of us here agree on, and I'll use one example. With the tax situation, the Treasurer said he's not going to increase any taxes. I assume the government members support that. I think the Liberals do and ourselves as well. On some of these issues, I would like to come to consensus with something powerful saying that this committee and the public who appeared before us will recommend that there are no taxes in the budget, as an example. I think, believe it or not, there can be some consensus that we can come to.
So I would I guess like to have some of the information that I talked about, but I realize that that probably will be unworkable. So if we can do that and get some consensus, then I think the report will be valid, because, believe it or not, the four or five points we agree on will be very powerful. This committee can send a message on those issues.
The Chair: I understand what you're saying, Mr Carr. I guess you're right, though, it would be difficult to arrive at that consensus, given that some people said there could be some structural tax changes, and indeed some people actually said that taxes could be increased. I know because I heard them say that. So we couldn't say there was a consensus per se. However, given what I've heard so far, I was wondering, would it not be wise to list all those individuals who have contributed a document to this committee with respect to writing this report? Is that an impossibility? Because you know we have had sent to this committee many documents, or are they listed? Maybe they are.
Ms Campbell: I think in the past there have sometimes been lists of witnesses included as an appendix in a report.
The Chair: But documents that are delivered to this committee where people haven't been a witness before the committee necessarily in a public venue?
Mr Sutherland: They can be listed as part of the presentations in the appendix.
On what Mr Carr has been saying, there are two different issues here. One is the report reflecting what people said in terms of their presentations, and then the second issue, which we normally go through afterwards, of course, is, is there a consensus of recommendations we want to make to the Minister of Finance in a report to the House? We spend some time trying to make that consensus, and then those that we don't agree upon, well, we go back and we submit our individual minority reports.
But the first thing we need to do is continue to work through this outline, and once we've got the outline of the report, later on, when we come back for our next two days, I would assume that's when we'd talk a little more about what issues we agree upon and what issues we don't agree upon.
Just one other one. In question 1, I would also add the issue of the federal budget as one of the contexts for the presentation, because that was mentioned quite a bit too.
The Chair: I'd like to clarify something, because it concerns me that the public who are watching and who are ultimately waiting for this report understand that all the documentation that comes before this committee is taken into consideration when we write this report.
For example, and I use it because it's recent, the Dialysis Management Clinics Inc submitted a document to us today for our perusal and for consideration when we write this report. I wouldn't want to suggest or leave the impression with anyone that all the documentation we've received hasn't been taken into consideration when we make this report, yet somehow as I've listened, and maybe I'm mistaken, it seems that there's more credence or more weight given to the people who made the public presentation versus those who made presentations only through a document like this.
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Mr Sutherland: Written submissions could go in the appendix. They can be listed as part of the presentation.
The Chair: I just don't want the impression out in the public to be that we have not given consideration to written submissions, when we have. Wouldn't we all agree? Yes. Very good.
Mr Phillips: I think we may be down on detail. The report last year listed all of the witnesses and I would think it should list this year all of the witnesses and all of those who made written submissions. And I would hope that the second thing we have is something not unlike what the researcher prepared on the various recommendations we've received under various headings.
I don't think we'll be able to go through each of those recommendations and say "I agree," or "I disagree with that." I think it's legitimate to put forward those recommendations and say, "These were recommendations from groups and they formed part of the thinking for us when we were preparing them." But we will drive ourselves crazy if we debate each recommendation. I think the reasons for the witnesses coming were, firstly, to give us what the perception is out there, what groups are feeling and what they think we should be doing and providing us with a broad cross-section of recommendations. The second thing is, many had unique, good recommendations we should try and pluck out if we can. But I think what we want to do is to assure those who appeared before us and those who sent their written briefs that they've all been considered.
Mr Carr wanted in the document a list of where their recommendations appear in the report. This is detailed, but it's fairly easily done by the research. For example, last year we had a list of witnesses: CFIB, Canadian Federation of Independent Business, date of appearance. If we also simply list pages in the report where their recommendations are recorded, maybe that helps you, Mr Carr. If you want to know, "Where's the CFIB's thinking?" it would simply say page 21, page 24, page 26. That is detailed, but I think that may solve part of our structural problem on dealing with this thing.
Ms Campbell: I'd just like to respond to Mr Phillips's remarks. There is some concern arising out of the members' concern that there be a proper representation of all the presentations that were made to the committee, both oral and written. It might be very difficult to incorporate individual references to every organization that made a presentation to the committee. I'd be concerned that if people looked at an index and maybe didn't see their name there, they'd be concerned. That's a problem that could arise out of this and we're trying to prepare --
Mr Phillips: If I might respond, last year in the report there was a list of witnesses, and before that there was a variety of pages that indicated the comments that we'd taken out of their proposals. I gather there is a plan this year to have a similar chapter in the report -- let's take "Economic and Fiscal Policies," where there's a series of comments from various groups. All I'm suggesting, and this is just a small point, is that when we list the witnesses, we list the pages that have references from them.
Ms Campbell: The summary that you're making reference to in last year's report dealt exclusively with the comments on the Fair Tax Commission report. There was no summary of the comments made about the general pre-budget consultation.
The committee did decide yesterday that a final summary of recommendations would be made available and there would be reference to the availability of that particular document in the report. It would be made available through the clerk's office rather than being made part of the actual report.
Mr Phillips: Okay.
The Chair: Ms Haslam, and thank you for being so patient.
Mrs Haslam: You're welcome. I would like to reiterate what our legislative help is. This is only one week. To put all of this in the report we'd have to double that, and I can't see that. I think what Mr Carr is talking about is something like a footnote: who said this and who said that. What I see in a general report to the Treasurer is an overview, and if anybody wants to get into the details those details are available in Hansard, those details will be made available with this type of information. But in the report that we're giving to the Treasurer, I think we're looking at a more general overview of what's being said and what this committee is recommending, and I would rather see that than have the clerk go through everybody's presentation and written document and indicate a page where it fits into the report. It's ludicrous to have her sit there and index everybody's words in this report. I think this report was meant to be a general overview, and that detail is certainly available should other people want to take advantage of it.
Mr David Johnson: Ms Campbell, a question about the number of quotations you would probably use: I suppose you would say at this point you haven't determined, but if you were to hazard a guess, what would be a normal course? Would we be talking about hundreds of quotations or dozens or 10? Roughly what ballpark?
Ms Campbell: I'm afraid that at this point in time I can't hazard a guess because I haven't started actually writing the report. Secondly, I think much of that will depend on what the committee decides to do in terms of the content of the report in the following sections.
Mr David Johnson: My guess is that it wouldn't be a great number of quotations, that there would be a general flow to the report, I would think, and then you would perhaps, at appropriate points, support that with a quotation from a particular group. As I understand what Mr Carr is asking for, it's not to quote each and every group in the report, but in the normal course of events if a group happened to be quoted, whether it's the CFIB or whatever it is, whatever group happened to be quoted, that simply be noted so that it could be easily found. It would seem to be that what he's asking for is, in a sense, that you write the report in the normal way with a normal number of quotes etc, whatever that is, and then just note that in the reference part of the report.
Ms Campbell: I think the term I would use is "reference" as opposed to "quotes." "Quotes" implies that you're quoting verbatim from what the witness said. References would be made if one organization made a general comment that was indicative of how other people felt. We might make direct reference to them, saying they represented the general feeling, or make a general statement that, "There seemed to be a consensus that...."
Mr David Johnson: You see that as being an onerous task, do you?
Ms Campbell: There would be perhaps some technical complications involved in preparing indexes.
Mr David Johnson: All right. Maybe we're beating this to death. Maybe we should just allow you to give some thought to this. But it seems to me like a bit of a mountain is being made out of a molehill. Whenever a reference has been made, simply make note of that in some index in the back. That's all that's being requested. Maybe as you go through it you'll see if that's possible.
Ms Campbell: Could that be discussed when the committee has had a chance to look at the draft report and we come back for general discussions?
Mr David Johnson: That might be possible, sure.
The Chair: That's a very good idea, Ms Campbell. Mr Carr would like to conclude this.
Mr Carr: Since I started this whole thing. I said we'd get consensus; we can't even get consensus. It was very simple. Turn to page 2, if you will, under "Provincial Deficit and Debt." Elaine has already given us the people who have commented on it. It's not a lot of work. The APMAC, ONGA, COMER, COCA and the CMA were the ones in her report that commented on that. All I would like to do, and I like the outline the way it is, is after the outline that she is going to prepare, we put those symbols there of the people who spoke to that issue and in the back we alphabetically list those people. That's all I'm asking for. It's no big deal, and maybe I didn't explain myself, but I also will say this: If it's too much trouble to do it -- quite frankly, you have already done it -- I would withdraw it and let's just move on.
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Mr Sutherland: That is much different from what I thought he was asking for. I believe that has been done at times throughout the report, where the acronym for the organization was referenced in past years. I thought that earlier what he had indicated was he wanted the acronym, or at the end, where the lists were, he wanted to come out with which page in the report the acronym was going to be found under the different subjects. So what he said now, I believe, is what has been done, or maybe not all the groups listed, but there has been some reference noted that a group made some reference to that specific topic.
The Chair: I think the most important thing here is that Ms Campbell understands what needs to be done, however the rest of us see it, and I think she does.
Mr Sutherland: You're right. That's far more important.
Mr Larry O'Connor (Durham-York): Actually, this is really exciting television, no doubt. I'm glad we've got the report discussion here on camera.
I'd like to refer away from this detail that we're dealing with and refer to what Mr Johnson referred to earlier on. He had talked about a chart that may reflect projections of revenue and what's coming from different sources to the government. I would like to add to that request and suggest that maybe what should be included in there as well is, given that in the framework of what we're talking about as far as the different headings -- the sectorals, the transfer payments to our MUSH sectors and what not -- somewhere in there we also include a chart of the transfer payments we receive from Ottawa, and we'd probably want to go back a few years.
It's pretty hard to project, because Mr Martin hasn't come up with a budget. We've heard a lot of noise to this point, but that budget hasn't been laid out. If we can look back, maybe, to get a perspective of what we have been able to expect from the federal government in transfers, we can include that as well, because people will no doubt take a look at this document and try to figure out how the Ontario government comes up with its budget.
There are obviously suggestions that have been made to us through this committee hearing process, and I think that would be good background information to be included. In fact, I think some of that information probably is very readily available in some of the budget consultation documents that have been prepared by the Ministry of Finance already.
The Chair: We have to decide if we're going to include graphs or anything like that in this report. If we do, we can't use any singular graph. We'd have to give an overview or a complete indication of all those graphs with respect to any particular matter. Mr Kwinter was one who was concerned about how forecasters arrived at the particular numbers they arrived at. We've had many forecasters, and if we're going to put in a graph with respect to that, we'd certainly need to have a range.
Mr David Johnson: Can I assume then, Mr Chairman, that we're on to page 2, under "Economic Summaries and Forecasts"? I think that question is sort of tucked in under that section. If we are, could I ask legislative research, Ms Campbell, what sort of information she was going to put in under "Key Economic Indicators and Projections"? Perhaps Mr O'Connor's suggestion would come in under that category, along with my request.
Ms Campbell: In past years, we have looked at the principal economic indicators such as real GDP, employment, unemployment, inflation rates and, in many instances, housing. There have certainly been references to other indicators as well, such as interest rates.
Mr David Johnson: Interest rates: That would be helpful. I would certainly hope that interest rates would be included. Mr O'Connor's request was for federal transfers, I guess, or other transfers.
Mr O'Connor: That would impact on what the fiscal situation is, the parameters the Treasurer is going to have to deal with in coming up with the budget.
Mr David Johnson: Is that an economic projection?
Ms Campbell: It hadn't been one I had considered, but there could be references to federal transfer payments in this area if the members would wish that it be there. It might be a little more difficult to find an appropriate chart within the time frame that we have been allowed.
Mr David Johnson: Personally, if you're referring to a graph as something that looks like this, and if that's a problem in terms of making it up, I don't need a graph. A chart with just the straight numerical information is fine, as far as we're concerned. But under "Projections," would you be including provincial revenues that are projected for the next few years? Would that be one of the projections?
Ms Campbell: If the committee would wish that to be there, we could perhaps --
Mr David Johnson: I would certainly find that helpful. I notice that the Finance minister in his submission has projected Ontario growth, for example, for the next four years, from 1995 through and including 1998. Would it be possible to have our projections on the same time basis as the minister's projections for economic growth?
Ms Campbell: Are you perhaps suggesting that we use some tables prepared by the ministry?
Mr David Johnson: Yes and no, I guess. I assume, again, that there'd be a range of information. Is that how you normally do this?
Ms Campbell: There might be some difficulty in doing additional research to find the information you would like to have included. As has been said, we have a week to put this together.
Mr David Johnson: Certainly, the minister has made a deputation to this committee, so I would assume that the minister's information would be part of the report, whatever information has been conveyed there with regard to economic growth, revenue growth, tax growth pertaining to that economic growth over the period of time, and any information that any other source has given. Several of the bank groups gave information -- I believe the Royal Bank, for example, gave information -- and various other groups or associations gave information. I would find that sort of information very helpful, over a four-year period, if it's possible.
Ms Campbell: We'll see what we can do.
Mr Sutherland: I just want to comment on that issue. I think my colleague Mr O'Connor is right in terms of reference to transfer payments, because that issue came up from many of the groups.
But I'm not sure we're going to be able to respond to Mr Johnson's request. It may be just me. While we've always had economic projection growths put forward for out years, I don't ever recall seeing a revenue projection put forward for the out years. I guess some of that has to do with the fact that each year, as you're preparing the budget, you determine those revenues and what you do on the tax side, and those tax decisions are usually made on an individual-year basis rather than on a three- to four-year projection in terms of what's there.
I really don't know how you're going to come up with what Mr Johnson is asking for in terms of revenue projections for the next three to four years, because the only projections I assume the ministry could put forward are those projections based on what the system is right now for this year. Based on this year, if we don't make any changes one way or the other over the next four years, we can say the revenue projections would be X, based on what we're saying for some degree of the economic growth.
I'm not sure there's a lot of value in trying to produce three- and four-year revenue projections, given the way our budget-making process is done each year, looking at taxation issues on an individual basis.
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Ms Campbell: I'd like to respond to Mr Sutherland's comment and indirectly to Mr Johnson's. I guess this raises the question, does the committee want the report to be a summary of what was actually presented to the committee in the hearings, or what is available in addition to what was presented to the committee?
Mr O'Connor: Mr Chair, if I might, when you consider the point raised by legislative research, the request I made actually wasn't presented to the committee, so maybe it doesn't belong in the report, in fairness to the way it's going to be presented. The reference to the transfers, as they've been outlined in pre-budget consultation information put out by the ministry, was in a different context. It was put in the context of where Ontario stands in terms of its share of transfer payments as opposed to other provinces, in the pre-budget consultation information. Maybe in light of that, it doesn't have the place in the report as I was suggesting.
The Chair: With respect to what Ms Campbell has asked, I guess we need a consensus here.
Mr Sutherland: It should reflect what we've heard.
Mr Kwinter: I'll combine a response and what I want to talk about. I'd like to give a dissenting opinion.
I think the mandate of this committee is to advise the Minister of Finance in the pre-budget consultations. I don't think it's necessary just to report on what we heard. If that is the case, we don't have to be here, all we have to do is say, "Make your submissions," because the people who come in have virtually just been reading their submissions, and, with all due respect to all of us, to get two minutes or three minutes to ask them a question is in my opinion absurd, because it doesn't do anything other than fill the time.
It would seem to me that we have a responsibility and an obligation to give some advice to the Treasurer, and if there's information available that is pertinent but we haven't heard it at this committee, I don't think it makes any sense to say, "Forget about it, because no one brought that up." We have that obligation; I think we should fulfil it. If there's information available, if it's going to be useful and helpful to the formulation of the budget, I think it should be included. That's my response to that specific issue.
I would like to suggest, on the basis of information we could include -- it's unfortunate my colleague isn't here because I think he knows what the factor is. For every growth in the gross domestic product, there is a factor that can be used to tell what it means in the way of revenue.
If you take a look at the letter we got on February 9 from Steve Dorey, the assistant Deputy Minister of Finance, he sent us Ontario Survey of Economic Forecasts for 1995 from a variety of groups that do this sort of thing. He's got some out years projected, again from a variety of people, right through till 1998, and he's got the averages for 1995 to 1998. I think that would be useful to include in the report. It actually is a submission to this committee because it was forwarded to him for our benefit, and I think that might be of use.
Mrs Elinor Caplan (Oriole): I don't want to repeat and waste the time of the committee, because Mr Kwinter covered much of what I was going to say.
The factor on revenue growth that's usually accepted is that you take 90% of the growth in GDP and that will give you your revenue growth over time, as the factor.
Many of the members on the committee, certainly myself, meet on a fairly regular basis with people who, for whatever reason, don't want to come to committee, are unable to come to committee, have an interest in what the committee is doing but are too nervous to come before committee, so they speak to us and we hear what they have to say. Certainly the committee time has been relatively limited as well. There just isn't time to hear from everyone. I'd point out that Mr Bruner was one of the few individuals not representing a group or organization who appeared before the committee.
If we have heard advice from constituents and interested persons or experts, perhaps we should consider that and be able to include that in our recommendations to the Treasurer as he prepares his budget. Some of it's included in other presentations and some of it I think is quite independent. I think we should be open to do that.
I don't think what we want to do is get into a massive document which is in any way a repetition of information that is in other places. My advice to research would be to, wherever possible, look at the streamlining of appendices. I personally like the bibliography approach, where it's noted and listed in that way, and research has done an excellent job in past reports in making sure that it's there and it's noted. I also like the suggestion of Mr Phillips that, wherever possible, put a page number for the reference for those who have made presentations.
But I would stress that we have a responsibility here to give the government, the Treasurer, advice as they put the final touches in the drafting of the budget that is expected within the next couple of months. If all we do is simply reiterate and restate what was put before the committee, I think we're not doing our job. Certainly we want to tell those people who came before committee that we heard them, we listened to them, and for those who didn't have the opportunity to come here, to know that we listen to our constituents, hear what they have to say, and try to reflect that in advice and recommendations to the Treasurer.
I also think that one of the most significant things we heard, and something I'm very concerned about, is the whole issue of transparency, accountability and openness, so that people can understand the numbers in the budget, which the Treasurer has said is his planning document.
The very first item we are going to be dealing with is the advice from the Provincial Auditor. In that section it's important that we have a very clear statement from this committee that we support the Provincial Auditor in his advice to the government that it present the budget in a way which is consistent with the way the books are presented at the public accounts committee at the end of the cycle.
We agree with him that the confusion must end, because that's in the interest of the public and public accountability. I hope this committee will stand firm behind the auditor in making that recommendation, because the public interest demands that we set aside the opposition and government roles and hats we wear and recognize that the advice from the Provincial Auditor is the advice that is in the public interest and that we support that. I want to be very clear about that. I hope that will be included in our report. If it is not clear that we support the Provincial Auditor as a part of this report, then I think the report we put forward in fact will not be significant.
Mr Carr: I agree with what Elinor and Monte said. I'll speak to the previous point rather than getting into the auditor, although to keep it flowing I'll get into that. I don't want to spend a lot of time on this, because if it isn't in the report we're going to put in a minority report.
What might be helpful with the reference to the federal transfers -- as you know, the government, on pages 98 and 99, puts the budget revenue in dollars, cents per hundred or a percentage. We can include that with a reference to, say, 10 years ago. I have the budget from 1984. I don't think the NDP will want it in there, because when you look at it the federal government payments used to be 17% and they're now 16%. It flies in the face of what the Premier is saying, so you'd better be careful. I don't think they're going to want it in there, for political reasons, but I suggest that we do that, going back to what Larry said about the federal transfers.
Can we do that, compare 10 years ago? The figures are right there. Elaine doesn't have to do a lot of work; I can give them to her. Can we include that in the report?
The Chair: This is to be determined, Mr Carr, what is or is not going to be included in the report. I just remind you that it's not a minority report that you'll be submitting; it'll be a dissenting opinion.
Mr Carr: Whatever we call it.
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Mr Sutherland: Can I just make a couple of comments? This report does a couple of things. First, part of the main content of the written report that we asked the researcher to do is to try to summarize what has been presented. It's not just a regurgitation, but to try to summarize the main themes, the main comments etc, under different categories. That process, in my view, is separate from any recommendations we want to make on any issue, whether it's what the auditor said or what have you. I think it's important that we try to keep those two issues separate, because they both are important parts of the overall process. But we have always traditionally tried to summarize what has been presented through the different categories, and I think we should continue with that approach. The point I was trying to come back to with respect to what Mr Johnson had requested, which is revenue projections -- I think the economic forecasts of growth are fine. What I was trying to say earlier, though, is that I don't think trying to put in a chart of revenue projections is that meaningful in terms of the out years because, as I tried to say, revenue also gets decided on a yearly basis in terms of what you do taxwise, whether you do tax cuts in certain areas, whether you do tax increases, whether you leave it the same. All I'm saying is that you can put those revenue projections in for the next three to four years, but I'm not sure that's a very helpful process.
I think the economic forecasting is helpful because obviously that's going to influence what you do on your revenue side, whether you decide maybe to cut taxes, maybe to increase them, and it gives you some sense. I guess what I'm trying to say is that the only base you can use in deciding those projections is the current-year base in what those revenue projections are. I just don't think looking for the revenue projection figures is going to be that helpful in determining what, overall, is going to happen in the out years, because there are so many variables between now and then on what will influence those revenue projections.
I wasn't around here between 1980 and 1990 to know whether that was ever done in a budget, but I don't recall us putting those figures in a budget or doing them in our past reports. That doesn't automatically mean that's a reason for exclusion, but I just don't think people see that as the important piece of information.
The economic growth figure does seem to be an important one, and Monte's comments about putting in the reference to where the forecasts are. I take note of the researcher's comments that because, as usual, the economists don't present their information in a common form it's very hard to put that into a graph situation, but we could have reference to what the economic forecasts are.
I question, though, what importance or what real meaning we're going to get out of revenue projections four years from now based on this year's situation.
Mr David Johnson: The reason I made that request is because most of the deputants, if not all, did refer to the issue of the deficit and the debt of the province of Ontario. I would say the vast majority said that this was the number one problem that should be addressed. There were a few, one or two or maybe three, who indicated that there's too much urgency being paid to the deficit and the debt, but I think by far the majority said that's what we have to come to conquer. I see the parliamentary assistant nodding his head in agreement.
In addition, the auditor has been brought into this fray, and he did himself request, in unprecedented fashion, to be able to come before this committee and explain his concerns. His concerns were essentially around the same issue, the deficits and the debt of the province of Ontario and ensuring that the deficits were reported in what he feels would be an accurate representation. Again I see the parliamentary assistant nodding his head in agreement. That seems to be really one of the focal points. Are you still the parliamentary assistant?
Mr Sutherland: Yes.
Mr David Johnson: Yes, right. Good.
That seems to be one of the focal points of this whole exercise, and if we're going to make recommendations or presentations through this report to the Minister of Finance that would capture the real essence of what happened, I think we would have to do so fully on that issue of the deficit and the debt. The submission of the Minister of Finance, for example, does give the projections of the deficit for a four-year period: 1995, 1996, 1997 and 1998. This is, again, a key issue. I'm looking at the plan for the province of Ontario for the next four years in terms of that key issue.
How is the deficit calculated? What key inputs go into the deficit? It would seem to me that among the top three key inputs into the deficit calculation is economic growth. We do have a forecast for economic growth. There would be many who would say that it's quite a rosy forecast for economic growth over the next four years, including myself, but at least we do have that kind of forecast from the government of Ontario.
Another key aspect would be revenue growth, either through tax increases or economic -- well, economic growth we've already talked about, so, for example, revenue growth associated with tax increases. How can the government forecast what the deficit is going to be if it doesn't forecast what the revenue growth is going to be? How is it that we can establish what the deficits are if we don't know the key components of it?
What stock can we put in this most important issue of deficit forecasting if we're not prepared to put down what the numbers are that went into its calculation, the numbers such as economic growth, which we have put down, but tax increases, revenue growth associated with tax increases, or indeed the expenditure cuts, I presume. Otherwise, the deficit calculation makes no sense. Here it is on paper, but there's nothing to back it up.
I agree with those who would say we owe it to this process to go a bit beyond just summarizing what's on the pages. I don't think we ought to concoct absolutely new issues. If nobody has referred to the issues, then I don't think we ought to concoct them out of thin air, but certainly deficits and the debt problem have been referred to by everybody and I think in this report we owe it to the whole process to explore this very key issue of deficits, how we see it unfolding over the next few years given the projections that we've seen, and they would certainly include revenue growth as well as economic growth, expenditure cuts, that sort of thing. How do we come to these calculations?
I'd like to see that whole story explored because I think that's the number one story out of this exercise. I believe the auditor in his comments is coming at it from a slightly different direction but he's saying the same thing, that it's important to the people of Ontario that they get an accurate picture of deficits and --
Mr Sutherland: But on a yearly basis, not on that three-year projection.
Mr David Johnson: He's talking on a yearly basis, but the Minister of Finance is reporting four years: four years of economic growth, four years of deficits. The deficits only can be meaningful if the assumptions behind them are clear, the assumptions on increase in revenues, reductions in expenditures, any other assumptions that have gone into them. If they're not clear, then this isn't worth the paper it's printed on.
Mr Kwinter: I'd like to follow on on the discussion. There are figures that show what the projected revenues are going to be, because it's a direct correlation to the growth or the decline in the economy. The other problem you have is that I think the very basic question that we as a committee are going to have to address -- and there certainly wasn't unanimity in the deputants who appeared before us -- is, do we grow ourselves out of the economy or do we cut expenditures? Without calculating what it was, it seemed to me, again just from my recollection, that there were probably more people feeling that you couldn't grow yourself out of the problem, that you had to deal with expenditure cuts, which means there has to be some kind of a benchmark as to how you make that determination.
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Again, we have projections as to what the growth in the economy is going to be, and there are projections. They may not be quite accurate because they're just projections, but there are certainly projections, and as Mr Johnson said, there is no way that the treasury department can calculate what a deficit is going to be three years down the road unless they know what their revenues are going to be and what their expenditures are going to be. So I think it's important that we have that information in the document, just so that whatever recommendation this committee makes can at least be referenced to what the projections seem to be for the next three or four years.
I think that's important, because I think the key issue this committee is going to have come forward with is, how do we plan the fiscal recovery of this province? Do we do it by growing out of it, do we do it by cutting expenditures or do we do it by both, and to what level? That can only be planned based on figures that have some semblance of reality and give everybody who has to make those decisions some basis for making those decisions.
Ms Campbell: My question to the committee is, are we through with the section dealing with economic summaries and forecasts? Is the committee agreeable to the main points? I think I've taken notes on other specific projections, such as revenue projections, if those are readily available, and those will be incorporated into the report. We'll review the presentation made by the Ministry of Finance plus other ministry documents that have been prepared over the last year and combine that with what the forecasters presented to the committee.
Mr Carr: Just speaking to the first point, I take it then that there isn't a consensus on the federal transfers. If there isn't, let's go on and not put it in. There's not a consensus on that?
Mr Sutherland: I think there's a consensus that the issue should be referenced.
Mr Carr: Okay, but not how we're going to do it.
Mr Sutherland: The other thing we need to keep in mind with the federal transfers is, it isn't just the straight dollar issue, because a lot of the programs, of course, are funded on the basis of your population, so you have to take into account population growth.
Mr Carr: Well, the total number is moved up too.
Mr Sutherland: Yes. Well, your population growth, and then, has the amount of dollar support been consistent from 1984 to 1994 on the population growth basis? Of course, when we get into this whole argument between this province and the federal government, it comes into the issue of the capping at the 5% increase per year and that the growth in some of those programs due to, particularly when you go back to 1991, the hard impact of the recession and social assistance was far beyond 5%. I guess what I'm saying is, when you talk about that issue, you can't talk solely in what the actual dollar amount is, because that isn't the basis the programs were supposed to have been funded upon.
Mr Carr: What do you want see in there? Not to jump in, but what do you want to see? I told you what we want to see. What do you want to see, and maybe we can come to an agreement on it.
Mr Sutherland: What I would like to see is references made from the presentations on their concerns about transfer payments, and the Ministry of Finance made some reference to it as well. If the researcher reflects those comments that have been made, I think that's fine for now.
Mrs Caplan: On this discussion, what I think is really important is that we come to a recognition that there is one taxpayer, and whether that taxpayer is paying federal, provincial or municipal taxes, they are feeling the tax burden, they are saying, "Enough is enough," and they're also saying: "Stop your finger-pointing. It doesn't matter where it's coming from, I'm paying." This is what I'm hearing very clearly. So it's not a question of this committee sitting around and attempting to say it's not our fault. I see Ms Haslam nodding her head. The reality is that we have one taxpayer in this province and one taxpayer in this country and we've got to get busy solving our problems.
Mr Sutherland: And the presentations made that comment. So that would be reflected.
Mrs Caplan: They made it very clear that there was one taxpayer and that's what was represented here. We may all have our differing points of view or even our partisan philosophies. The reality is that we face fiscal problems that have to be addressed and there's only one taxpayer who's going to be able to foot the bill and he's saying, "No more," whether it's federal, provincial or municipal.
Mr Sutherland: Yes. But then of course the other question comes out of that: If that's certainly the case, that there is one taxpayer, how is the federal government going to renegotiate the basis of its programs and the basis of how those programs have been set up and established, and as we're saying, if there are no more new dollars in that sense, what are they going to do to develop a more fair system in terms of the distribution of the dollars they're providing to the provinces? I think that's where the issue comes down as to what that fair share should be, and then how are we going to distribute those dollars, that is, in a fair manner for this province?
Mrs Caplan: I think there's no question that everyone recognizes that there is a problem and that solutions have to be found and that some of those solutions will be found through discussions and negotiations. But the other message I'm getting loud and clear from my constituents is, "You guys have to start working together." They're referring to all levels of government and they're saying, "Just remember" --
The Chair: And we can start right in this committee, I have no doubt. Mr Carr.
Mrs Caplan: Okay. Exactly.
Mr Carr: I agree with Elinor and she's right about the public. What I'm getting at is when Mr Sutherland was giving direction to Elaine to say what the government said in that regard, because they are wrong. I don't want us to give direction to Elaine to use what the government said when they came here, or the Minister of Finance, because he was wrong in his assessment.
So Elinor is right that they don't want any finger-pointing, but I don't want the spin in our report to be the Minister of Finance's spin because Elinor's right. We will argue about it and it is not a consensus on it --
Mrs Caplan: That's right.
Mr Carr: -- because I think he's wrong.
I agree 100% with Elinor. The point I want to make is, when Kimble said to Elaine, "Use the consensus that came from the Minister of Finance," I cannot agree with that because they are wrong.
Mr Sutherland: That isn't quite what I said.
Mr Carr: Okay. I hope so.
Mr Sutherland: What Elaine said was that she would review the Ministry of Finance presentation, and I think as part of that presentation there should be some reference to the transfer payment issue. There are also other people who commented on the transfer payment issue and some of the forecasters, whatever, and a sense of what those people said about the issue should be reflected as well. I don't think you can ignore what the Ministry of Finance has said, but I'm not saying that should be the only source referenced in the report. Okay?
Mr Carr: One thing we can agree on then is what Elinor said, and she said it fairly eloquently: Can we put in there the agreement that this committee agrees, as she said, as I agree, with the fact that the public out there is frustrated and does not want the finger-pointing?
How we can frame it, there are some concerns out there about federal transfer payments, but what we heard is the public is one taxpayer and what Elinor said. Can Elaine incorporate that and can we agree, as a committee, that in fact, notwithstanding the different opinions on it, we agree here that we cannot be finger-pointing, that we have to work together and make a recommendation, as Elinor suggested, as a committee that this finance and economics committee recommend to the government that we work together because there is only one taxpayer and that's what the people want? Can we get that consensus in there?
Mr Sutherland: Okay. But again, you're asking now for the recommendations. What I'm saying is, right now we're going through the content of the report. The recommendation process comes at the end.
Mr Carr: That's a consensus of what we heard, I thought. Maybe I'm wrong.
Mr Sutherland: All I'm asking Elaine to do now is to do her review as she was going to do in terms of the Ministry of Finance and of course of the other forecasters with some reference being made to the issue of the transfer payments. When it comes back, then we'll decide, as we do with the rest of the content of the report, how we agree with how it has been presented.
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Ms Campbell: I think the issue of cooperation and, to expand it a bit, partnerships was emphasized by many of the people who made presentations and I think that was a theme that linked all the sections of our outline. That perhaps could be emphasized within "Economic Summaries and Forecasts," that issue of partnership or cooperation introduced at that level and then just repeated perhaps in the others.
As far as the issue of public frustration with taxation is concerned, perhaps that's something we could discuss under "Economic and Fiscal Policies," where it's suggested that one of the themes there be taxation.
The Chair: Does that conclude then our committee advice with respect to "Economic Summaries and Forecasts"? If it does, then we should move on to the "Economic and Fiscal Policies" portion.
Mr Carr: The auditor would fall under which section?
The Chair: The section that we're at now.
Ms Campbell: The note under "Economic and Fiscal Policies" states, "Witnesses made many comments and recommendations that focused on provincial economic and fiscal policies." As I stated earlier, a number of themes had emerged during the course of these presentations. We've listed three of these themes: provincial deficit and debt, taxation and private-public sector partnerships. These are merely three of the themes. There are others that one can find by looking at the summary of recommendations.
There was a group of presenters who dealt with issues relating to issues such as fees and non-tax revenues, regulation, red tape and paper burdens. There were a number of recommendations dealing with issues related to employment and job creation, government services and labour costs, capital and operating expenditures. We have pulled out three which seemed to have a number of comments made under them.
As I said, the first one dealt with the issue of provincial deficit and debt, then taxation and public-private sector partnerships. My question to the committee is, is the committee amenable to focusing on a few themes or would they like to discuss more than this?
Mr Sutherland: I think the issues highlighted were certainly main issues that the presentations put forward, so I think this outline is very good. My only suggestion is, under "Taxation," under bullet point 3, "references to specific taxes," I think we should have a separate section on property tax as well -- maybe it's just that we heard a lot more in the last couple of days about that -- the issue of property tax in terms of education and also the issue of assessment because -- as I say, maybe it's only because it came up more in the last few days -- I think those issues should be reflected and some reference to that put in there. Overall, I think you're covering those issues.
I would like to come back to the questions you've outlined under "Economic and Fiscal Policies" at some point though. I have some comments on that.
Mr David Johnson: Certainly the issue of assessment and property taxes did come up, there's no question about that. If we think back, although they were very prominent in the last two deputations that we heard with regard to farm assessment and shopping centre assessment, I suspect many of the business sector presentations had that buried in there somewhere as well, because property taxes are becoming a real concern in the business community. I would agree if that would be added on.
But another concern was payroll taxes. Did I miss payroll taxes here somewhere?
Ms Campbell: We just picked three to put in there. There were comments on that.
Mr David Johnson: Can I suggest that payroll taxes be added? The CFIB, for example, the Canadian Federation of Independent Business, did recommend that the employer health tax be eliminated for small businesses. I don't know if workers' compensation would necessarily fall under there, but certainly references were made to workers' compensation.
Mr Sutherland: Maybe we should qualify, then, "payroll taxes and payroll premiums."
Mr David Johnson: "Payroll taxes and payroll premiums" would be fine.
Mr Sutherland: Because workers' compensation is not really a tax. I know the perception is that it is.
Mr David Johnson: Yes, I understand. I was trying to bring it under the broad umbrella. Certainly there's a great deal of concern for payroll taxes and premiums, if you will. Could that be added?
Ms Campbell: Yes. You'd like to expand on the issue of government-mandated costs?
Mr David Johnson: Yes. What else do you contemplate under --
Ms Campbell: Would you like that under the taxation issue or would you like to put that under another section dealing with the regulation-red tape issue?
Mr David Johnson: It actually falls under both, you're right, but the employer health tax is very definitely a tax and it's certainly viewed that way by the business community, so I think it should be dealt with under taxation. Mr Sutherland's suggestion that the word "premium" be added is fine by me, because I think the WCB cost should be included there as well. If you want to deal with it further under red tape and regulations, wherever that comes up, then that's fine as well, because that's certainly a consideration. But that would go beyond the employer health tax and WCB costs, because the business community, as we've heard through the presentations, is concerned about other pieces of legislation that it would consider to be red tape, such as Bill 40, which was mentioned a few times during the various presentations. I'm a little uncertain. How do you propose to proceed? Do you propose to do those in two different sections?
Ms Campbell: I'll leave it up to the committee whether it wants to develop more than the three themes that are listed here, what other themes.
Mr David Johnson: My suggestion is very definitely that you add, as has been suggested, assessment and property taxes as a fourth, and as a fifth, you add payroll taxes.
Mr Kwinter: I'd like to recommend that we expand the categories by the two that were suggested by legislative research. I think the whole issue of non-tax revenues, fees and charges, is one that is of great concern. What has happened is that notwithstanding that the 1994 budget was hailed as no new taxes, there were lots of new charges, lots of new financial obligations by citizens of Ontario, and I think that's something we should address.
On the issue that Mr Johnson just referred to, the idea of red tape, again, the paper burden and the red tape are actually reflected in the dollar cost to the citizens of Ontario and are part of the economic policies that we should be addressing. So I'd like to recommend that those two areas be added to the list and that suitable comments be made in those areas.
Mr Carr: I agree. What I think we could do to be helpful and to speed it along a little bit, the table of contents has listed under taxation, if you refer to page 1, a couple that were added, like Dave and Monte said. I'm quite comfortable with doing it under the heading of "Taxation," and you've got capital corporation, employer health tax, add those others and continue on similar to what the table of contents is, whereas you see that fees and so on, on page 9, and regulations, are dealt with on their own. As I said right in the beginning, I think the table of contents, if we lay it out similar to the way Elaine has already done it, adding those two would be the way the format should work.
Mr Sutherland: Just a point on that. The one issue I guess I want to add and the reason I think it goes under here is that we haven't talked about the issue of job creation. I think there should be some discussion regarding the issue of job creation under this section and the impact of unemployment etc. I guess related to that issue are the issues the Finance minister highlighted. We could make some reference to youth unemployment, the work week issues, length of work week, too long, too short etc, some reference and discussion of that under this section as well.
Mr David Johnson: In terms of that issue, Mr Sutherland, job creation, the Ontario Restaurant Association made quite a plea for job creation, but their issues were somewhat different. They included, as I can recall now, the introduction of video lottery terminals, VLTs, and non-harmonization of GST and PST.
The Chair: And the gallonage tax.
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Mr David Johnson: And the gallonage tax, that's right, the elimination of the gallonage tax. If we're to do a job creation section, which I certainly have no difficulty with -- because I think job creation is one of the biggest issues we face in Ontario today and it should be definitely in the private sector, setting the table for the private sector to be able to create these jobs and that's what the Ontario Restaurant Association is saying. Could you include their views in that type of section?
Ms Campbell: The proposed outline has a third section entitled "Sectoral Issues." The question posed to the members under that section is whether they would like individual sectors discussed or whether they would like to have sectors merged or points of commonality presented in a general overview. The foodservice sector is listed there. In the past, we have discussed the specific concerns of a sector in this particular area. My question to you is, would you like that changed so that the specific concerns of a sector related to job creation were incorporated under the heading "Economic and Fiscal Policies"?
Mr David Johnson: I would certainly think any analysis of job creation would have to be thorough. An industry like the Ontario Restaurant Association represents is a huge industry, number one; number two, it's an entry level. I would think there'd have to be at least some reference to their points of view in there.
Ms Campbell: We'll provide linkages between the sections so there will be references to that.
Mr David Johnson: I don't know exactly how you do this because, again, this is my first time through this process.
Ms Campbell: We can link the sections.
Mr David Johnson: But I would just consider that to be an important part, whether it's contained separately by themselves, but I think at the very least there should be a strong linkage.
Mrs Caplan: One of the points I'd like to make is that in looking down the list on "Sectoral Issues," I think that not all of the sectors in the economy are on the list and not everyone was here making representation and presentation. I like the approach of looking for the commonality in the representation and, certainly, again, it's not just the restaurant association but everyone that I've been talking to agrees with the importance of creating a climate for jobs and investment in Ontario. That's in the interests of every sector and the recognition is that it's the private sector, and particularly small business, that is going to create jobs, if we give them the climate in which to do that. I have some concerns about us going sector by sector because I think there are some broad general themes that apply to all sectors in society and certainly in our economy.
The other concern I have is that if we list sectors, those that were here, there might be some misinterpretation that in fact the committee is suggesting that only these sectors have an interest or that in fact these have some priority interest. People are sick and tired of the notion of special interests and I think we have to be very careful when we send out the message that it's a broad policy thrust to create a climate where jobs can flourish in the private sector, that this must be a priority and that it's not the role of this committee to identify which are the priority sectors in which that will happen but that it should be more of a fiscal and economic policy thrust of government and of the Legislature to support initiatives that will allow the private sector to do what they do best, which is generate wealth, create jobs, if they are in an environment which is not anti-private sector.
Mr Carr: What I would propose, and I think there is a consensus -- I'm seeing Kimble nod -- following up on what Elinor said, I would like to see a new heading. We've got "Economic and Fiscal Policies." I'd like to have "Job Creation" in there, in which we could talk about all these issues. The sectoral ones would come into play there.
But I disagree a little bit with Elinor. I'd also like to keep "Sectoral Issues," and I don't think people will think it's any more important. It's just that there were particular sectoral issues that were raised before this committee and I think we can incorporate them. I think we can come to agreement that after "Economic and Fiscal Policies" there should be a section itself called "Job Creation," and then we can get into that, and then I would continue on with the way it is. But I still think I wouldn't like to take out the sectoral issues. I think they can be dealt with because some of the issues weren't related to job creation. So let's put in "Job Creation" as a whole new heading in the table of contents.
The Chair: Is everyone in agreement with having a heading, "Job Creation"?
Mr Jim Wiseman (Durham West): I want to talk about that.
Mr Carr: We might just agree.
The Chair: Sure. We'll just continue along then.
Mr Kwinter: I'd like to recommend that we discuss specific issues as they reflect on what we're talking about and we make the connection for a sectoral group but that we not list them per se, for the reasons that my colleague Ms Caplan stated. I'll give you an example. If you look at the list right now, there are three areas that are not specifically mentioned that are fairly significant in Ontario. One of them is tourism. Even though we talk about foodservice, there are lots of tourism activities that have nothing to do with foodservice, so they're not mentioned. They would be very upset if they felt that tourism was not a factor to be considered in the economy of Ontario.
Mr O'Connor: Agricultural issues.
Mr Kwinter: Agriculture is listed but we don't have communication. We have telecommunications but we don't have communication -- newspapers, books, things of that kind. We don't have the aerospace industry.
I think you leave yourself open to a lot of criticism if you do that. I think that in no way does it detract from those people who made presentations, and they can be referred to and they can be linked as we go through it. But I think if we start singling out, we immediately leave ourselves wide open to saying, "Well, you obviously did not consider our particular industry and we are a significant player." Whether they are or not is subject to interpretation, but everybody thinks that they are important, and they are. I think it's important that we don't try to arbitrarily decide which groups have an influence and which don't.
Mrs Haslam: I don't mind the job creation coming as another heading and I do agree that under general economics those items can be talked about, but in the "Sectoral Issues" there were specific things that were raised, so I see a benefit in keeping the sectoral issues there. I would like to take a look at the foreign and domestic loans problem that was raised about foreign banks and the problems of foreign ownership on the debts. Whether that's a sectoral issue or not, I thought that would be best handled in this area. But I do see a benefit, because there were specific issues around sectoral. Not all sectors came in to see us and, as my colleague has mentioned, a caveat usually is put in saying: "These were some of the issues that came up because these people came before the committee. There will be other issues in other areas, in other sectoral entities." Perhaps we can do that in a way that says while they didn't appear before us, there were some other issues that we could mention.
But I like the idea of keeping the sectoral issues in a sectoral basis, because there are specific issues that each one of them brought -- as long as we don't repeat them. If one of their sectoral issues was jobs and we've already tackled jobs or if one of their issues was GST harmonization and we've already tackled that under taxation or economics, then let's leave it. But there were specific things that each sector had and that's where this should be indicated, in this area.
Mr Wiseman: I'd like to follow up on what my colleague has just been talking about in terms of the banks. I think we need a section in here about the Bank of Canada, the role it plays in the economy, the fact that on at least one occasion we attempted to get the governor of the Bank of Canada to come before this committee, about four years ago. He refused.
We need to discuss the interest rate policy. When I talk to businesses in my riding one of the things they say to me is, "Don't increase taxes," and some of the other issues around payroll, but they say that the most devastating thing to them is when the interest rates go up and that this is the biggest job killer that exists in terms of the single most important factor in terms of inventory, costs of inventory, the amount of money that they have available for job creation, for expansion, the fact that many of the businesses have indicated that they cannot get loans from the banks. All we heard from the Canadian Bankers Association was about all of the nice, wonderful seminars that they're holding and little of the actions that they need to take.
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I think we need to have a discussion in this document about the Bank of Canada, the fact that it doesn't live up to the Bank Act and that the province should be looking to pushing the federal government to force the Bank of Canada to live up to its obligations under the Bank of Canada Act and the whole issue around when and why interest rates should go up.
For example, just to take a look at the 1981 interest rates, I can remember that the interest rates were 22% or 23%. The accumulated national debt in 1981, if memory serves me correctly, was about $125 billion, and the highest percentage of that was being borrowed within the boundaries of Canada. Yet here we have the Bank of Canada pushing the interest rates up to curb inflation, which had huge consequences, and then they did it again in 1987 and 1988, and it looks like they're going to do it again.
So I think we need to have some comments in terms of job creation. It's a deliberate policy on the part of the Bank of Canada to put people out of work to curb inflation. I think we need to condemn that and to say that the federal government needs to stop allowing that to happen, because if you're going to have real job creation, then you have to turn around and say that the non-accelerating inflation rate of unemployment is obscene, that you will have a non-elected body with the kind of power available to it to keep and deliberately put people out of work to keep an unemployment rate in this country of 9%.
I think something has to come in this document condemning that and saying that it makes our job to forecast what the job creation is, what the revenues are going to be, what the rate of welfare recipients is going to be, very difficult if you've got a group of people or a single person sitting in the Bank of Canada, non-elected, turning around and saying, "Well, today we're going to raise the interest rates because" either "the Federal Reserve in the United States did" or "unemployment has dropped in this country, and now we're going to jack it up."
How counterproductive can you get? We have an infrastructure program trying to put thousands of people back to work and the Bank of Canada going: "Oh, my goodness gracious, look at that, the unemployment rate is going down. That's going to be inflationary. Let's put them out of work again. We'll raise the interest rates." Come on. I think there has to be a section in this condemning the Bank of Canada and condemning the actions of the federal government allowing this to happen.
Mr Carr: On the same point, I would like a section on it, obviously not with what Mr Wiseman is saying, the reasons being not the least of which he's wrong. Having said that, I think we can have a section in there. I wouldn't like to see it a main section. I think it can fall under "Economic and Fiscal Policies." We'll disagree with what it is, because as I sat there and listened to him it was the same thing the federal Liberals said prior to the election, and when they got in they did the same thing.
So these simplistic answers, I sit here and say -- and I won't be confrontational, but what I told David about it -- he obviously is wrong, in my opinion. But I think it can be put in as a section under "Economic and Fiscal Policies," and what we decide to do with it obviously will not be Mr Wiseman's interpretation, because we will not come to agreement on that. But I think it can be in there.
I wouldn't suggest that it's a main issue. I think it can fall under "Economic and Fiscal Policies," and then what we can probably come up with -- and they in their report may decide to condemn them, also notwithstanding the fact that it's the federal government that controls it -- what I think we can do when we get to that section is just say there is some discussion on the differing opinions. But we will not, obviously, come to some agreement, other than the fact that it should be in there, because quite frankly what Mr Wiseman is saying is totally and absolutely wrong.
Mr Wiseman: I just want to comment on that.
Mr Carr: You got it in there. Don't press it or I won't agree to even have it in there.
Mr Wiseman: If I am absolutely and totally wrong, then so is David Crane, who is the financial editor of the Toronto Star, and so are a whole number of economics professors who have been writing on this for some time, and so is Fortune magazine, which has been writing on this and clearly indicating that the reason the Federal Reserve in the United States is increasing its interest rate is because of decreased unemployment. So they want to increase the unemployment and that's what our bank is following.
There isn't anything wrong in that statement. It is accurate because that is the policy and it's well stated both by Paul Martin and again reiterated by Thiessen just as recently as last week when he made a speech in Edmonton. So if I'm wrong then, hey, I've got some pretty good sources behind me saying that I'm wrong.
Mr Carr: I'm just glad you're here saying it and not teaching our kids in high school these notions. I'd rather have you here expounding than I would in the classroom, quite frankly.
Mrs Caplan: Can we have a third option?
Mr Paul Wessenger (Simcoe Centre): I think Mr Wiseman has raised a good point but I think it raises the whole concept that we need some economic context with respect to our report relating to the whole aspect of the role the interest rates play with respect to budgetary forecasts etc, the impact they have on the economy. Certainly I would agree with him with respect to the consequences and I think most economists would agree. I think it's quite accurate what Mr Wiseman indicated, the consequences of the high interest rate policy we've had in this country.
But we also have to look at some other contexts. I think it's important that we look at some of the political contexts, the uncertainty that's there because of the Quebec referendum situation. All this has to be put in as background also. I think we need some overall, general macroeconomics context in which to put this, and then we can deal, of course, with the question of recommendations, and I think Mr Wiseman's really dealing with the question of recommendations. I just want to emphasize the need to have the overall macroeconomics context and the impact that has on provincial budgetary situations and the economy locally.
The Chair: Does that conclude comments with respect to "Sectoral Issues"? I'm sorry. I'm moving myself ahead a little too quickly. We've just completed "Economic and Fiscal Policies."
Mr Sutherland: Can I come back to "Economic and Fiscal Policies"?
The Chair: By all means.
Mr Sutherland: Maybe I'm wrong to have to go through and repeat all this. I think the consensus I got was that under "Job Creation" we wanted to talk more about the general issues rather than the specifics, and then when we get to "Sectoral Issues," talk about the specific issues but with some degree of connection. That was my sense of the direction we're giving on that.
Coming back to "Economic and Fiscal Policies," research has asked three specific questions and I'd like to put some comments out of that.
My sense of how we should deal with the issue of the auditor is this: Certainly we should note what the auditor's concerns were. I think we should note the Ministry of Finance's response to them and what the Minister of Finance has indicated it is willing to undertake. I also think there should be some discussion, as the auditor noted, about the issue that the budget is not a set of books -- he doesn't audit that -- and also some reference to the changes in accounting and the changes that did occur in the accounting process.
May I say, though, that if we want to put this issue into perspective, I think if we have a paragraph to reflect both the auditor's comments and the Ministry of Finance's comments, that would be appropriate for dealing with the auditor's comments and registering them as concerns and then the response and taking it from there.
The Chair: The Chair was a little confused because we kind of overlap these topics from time to time and I know we were speaking somewhat about sectoral issues. However, Ms Campbell did want to make a comment, I think, or did you want to wait till we concluded?
Ms Campbell: I'll wait.
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Mr Phillips: I think the Provincial Auditor's comments are absolutely at the centre of all of this. I mean, he has said, and I'm quoting him here, "The financial statements as they're currently presented do not reflect financial reality" -- and this is the term he used, "do not reflect financial reality" -- "under any accounting rules."
He's not talking about an argument between accountants. He is saying that the way the budget is being presented to the public does not reflect financial reality. He couldn't be clearer on this. In fact he goes on to say that the financial markets, which have access to analysts and to people who can spend a lot of time in depth going over the numbers, are able to see through the budget and are able to put their own interpretation on it and they make money on it, because they understand the real numbers. But he says that the Legislature -- us, members -- and the public are not getting the numbers that reflect financial reality under any accounting rules.
He's our independent Provincial Auditor, the one party, the one group that we rely on to make sure; the public relies on this individual and his office to ensure that we get a true financial picture in the province. And he's saying, as clearly as he could say it, we're not, and it is out by a substantial margin.
The government just announced it's going to spend $4.4 billion on capital, saying that this is its capital plan. In the budget, it is the government's intention to show not $4.4 billion of spending but $2.2 billion of spending. The auditor could not have been clearer. We are being misled by $2 billion on capital expenditures alone, and he is saying that there is no doubt about that. Zero doubt.
Just to go on, because I think it's fundamental for us, Last year, as we all know, the government sold all the GO trains: went to Bermuda, flew over to Bermuda, had a deal made, sold the trains for $430 million and five minutes later bought them back in Bermuda from the same company and showed that $430 million as revenue. The auditor says that's wrong, that you can't do that.
All of these government buildings, with the exception of the Legislature -- the Macdonald Block, the Michael Starr building in Oshawa, the Frost building -- have been "sold" and then the revenue taken in as an asset sale. We've sold the Frost building. We're showing that as revenue; $400 million, I think, of that money came in.
Mrs Caplan: Who'd they sell it to?
Mr Phillips: Sold, not to a company, but to a crown agency set up by the government. The government just set up a paper company, sold these buildings to themselves, showed it as revenue, and the auditor says it's incorrect. And auditors are normally very cautious with their wording. He doesn't say this was an interpretation of accounting rules. He says, in his report, that was incorrect.
So we've got these three things going on at least. It looks to me like $2.2 billion of incorrect reporting of expenditures on capital, and the auditor -- I guarantee you he has already said it; he's clear -- will blow the whistle on this when he finally gets his hands on it. The problem is, he won't get his hands on it until after the election.
This year we have sold, I gather, government ferries, government airplanes, I think again went over to Bermuda and sold them. I think the same company, the Bermuda company, whoever this Bermuda company is, has bought our planes and our ferries and then they're instantly sold back to us. The government buildings continue to be sold. I don't think yet they've sold any jails, although that's on the books. We are going to sell jails to ourselves. The Ontario government's going to sell the London jail to itself and show that as revenue. A lot of the OPP offices around the province have been sold, just a paper transfer, sold and then immediately leased back, and as I say, the ferries and the planes.
We are playing games with the books. Now, I know the rationale for it. The government clearly wants to show a deficit going down. The books you put out say, "Well, the deficit was $12.5 billion, it's going down now to $10.6 billion, and this year it'll be $8.3 billion." The auditor says it's not $8.3 billion. The auditor said that under any accounting rules this year's deficit is not $8.3 billion; it is at least $2.4 billion higher than that.
Why is this important? All of us know that if we are going to fix a problem, we have to understand the magnitude of the problem. I don't use words like this without some care, but the books, according to the auditor, do not reflect financial reality.
Mr Sutherland: The books do. The public accounts are the books.
Mr Phillips: See, for those of you listening or watching, the government says, "The books do." The books are what's called the public accounts.
Mr Sutherland: Yes.
Mr Phillips: The problem is, the public accounts do not come out until 18 months after the budget is presented.
Mr Sutherland: That's right.
Mr Phillips: So the government members are saying, "Well, you'll find out what the books say 18 months after the budget is presented."
Mr Wiseman: It's in the budget too.
Mrs Haslam: It's in the budget.
Mr Phillips: I say that if there's one thing this committee should be recommending strongly to the government, all of us should be recommending strongly -- we engage a Provincial Auditor; the public have confidence in the Provincial Auditor; the public have a right to know what the real numbers are -- we should be, almost as our first recommendation, saying: "We support the Provincial Auditor. We think it's fundamental that the budget be prepared using the recommendations of the Provincial Auditor."
We've had the Provincial Auditor saying this not for just a few months. He's been urging the government to do this for two years now. The problem we're going to run into, because we are now, as we all know, mere months if not weeks away from an election, is we are going to have a budget presented that will be so transparently wrong that --
Interjection.
Mr Phillips: Well, the government members may shake their heads --
Mr Wessenger: It's consistent with all the previous budgets.
Mr Phillips: -- but the auditor could not have been clearer. It does not reflect financial reality under any accounting rules. So I would hope our first recommendation would be to take the recommendations of the Provincial Auditor and make absolutely certain that the preparation of the budget is done in accordance with his recommendations.
The reason I feel so strongly about it is that this is dated February 16, 1995. The capital investment budget for 1995-96 is $4.4 billion. That's what the government says it's going to spend on capital. How much is going to be reported in the budget? Some $2.2 billion. There is $2.2 billion that will not be shown as part of the deficit.
The auditor, as I say, has been extremely clear on that. As a matter of fact, when we recall, many of the outside groups that came to present to us urged us to make sure that the way we present the numbers is a way that they can have some confidence in. So I would hope we could take that into account and that would be, as I say, a major part of what we're proposing here today.
The Chair: We've come to the point in time when we're going to recess for lunch. We'll resume with this deliberation at 2 pm.
The committee recessed from 1200 to 1403.
The Chair: We can continue with our report writing. It has been indicated to me that the research officer would like some more direction with respect to "Economic and Fiscal Policies" and therefore I'm going to turn --
Mr David Johnson: Mr Chairman, just on a point of order: I think we were on a particular topic. There was a speaking list and I would think --
The Chair: You're absolutely right, Mr Johnson.
Mr David Johnson: -- the normal course of action would be to complete that item and then deal with other matters.
The Chair: You might like to think that, but I think the research officer who's going to write this report needs some information.
Mr David Johnson: So what are you proposing to do? Go into other items and then come back to the speakers' list on this item?
The Chair: In order to speed things up at this point in time, let's hear from you, Mr Johnson.
Mr David Johnson: Thank you. Good. All right. There's a challenge then. I will do my best.
But the research officer -- is that your official title, Elaine, research officer?
Mrs Haslam: Friend of all.
Mr David Johnson: Friend of all of us, for sure, and doing an excellent job. She has indicated that she would like specific advice, and the question that is before us through this particular aspect of the debate is, number one, would the members prefer that the auditor's concerns precede those of other witnesses? That's the first question she's asked, and my response to that would be yes.
The second question: Would the members like the table prepared and presented by the auditor to be included in the report? I assume, Elaine, that you're referring to this table, and my answer to that would be yes. So that's pretty specific.
The third question I'm not sure I fully understand: How much detail would the members like included in the auditor's comments in his 1993 report, subsequent responses from the Minister of Finance, last year's report by this committee and changes with accrual accounting and consolidation?
I believe the government's response to that is one itty-bitty paragraph, as small as possible. I'm exaggerating a little bit, but you did say one paragraph. One paragraph was suggested, and my response to that would be that that would be doing an injustice to the auditor's concerns. I think in the discussion this morning it was established that the auditor took the unprecedented steps of asking to appear before this committee and appearing before this committee to express considerable concerns as to how the budget is presented and, in particular, how the deficit situation is presented to the people of Ontario and to the members of the Legislature. His own words were simply to tell it like it is, and I think, in view of the status and position of the auditor, it certainly merits more than one paragraph of explanation.
We've also heard that for the 1992-93 public accounts the auditor refused to give an unqualified opinion. That's quite a serious situation, again unprecedented in the history of --
Mr O'Connor: He was new.
Mr David Johnson: Oh. I see. Well, that was unprecedented in the province of Ontario. In the 1993-94 public accounts he did state his opinion, but it was after the deficit had been restated to I believe $10.8 billion, whereas the budget had stated the deficit at $9.3 billion is my recollection of those numbers. So I suppose his point was accepted at that time.
Now he is simply asking that the budget be stated in consistent terms, such that many of the items that were listed this morning at the end of this morning's session -- transfer of real estate, for example, and purportedly sold but in fact simply transferred from one wing of the government to another wing of the government when no sale is made cannot result in cash to the corporation.
Another aspect that he demonstrated particular concern about was loans to various institutions, education institutions and hospitals. These are reported as loans where in fact the auditor made it perfectly clear that, in his opinion, they were grants and they would not be repaid, other than through some circuitous transferral of moneys from one government pocket to another, but indeed the hospitals, for example, would not be raising money independently and paying "a loan" back to the government.
So he's made those points. He's indicated that he considers it very serious. Some of the deputants who appeared before us indicated that the squabbles, if I can use that word, between the auditor and the Minister of Finance are not helping the image of the province of Ontario and that this matter should be resolved, laid to rest, and not become a sore point for the province of Ontario.
So I think in that light, in light of the fact that it has been raised, in light of the fact that the auditor has specifically appeared, in light of the fact that the auditor has refused to give an unqualified opinion one particular year and continues to express concern with regard to the reporting of the deficit in the budget statement, yes, his concerns should be up front. Yes, his reckoning, which I have in my hand for the 1993-94 year and the 1994-95 year, would show a different real deficit than the government is reporting by in excess of $2 billion, for example, for 1994-95. These should be in the report and there should be an explanation of the concerns considerably in excess of one paragraph. That would be my response, Mr Chair, to those three questions.
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Mr Kwinter: I'd like to speak to this same situation. Without trying to appear preachy, I don't know of another situation that is as serious as this, and I'm not trying to be partisan or anything else. I can tell you that we in our caucus are the only members who are in this committee at the present time who were in the government prior to this government's ascension to power and I can tell you that if we as a government tried to do this, those members who are now the government would actually boycott this committee. If we were in the House, they would shut the House down and we would not hear the end of it until someone came to their senses.
I can tell you, as a former Minister of Consumer and Commercial Relations, that if this was done by a private sector company, it would be charged with breach of false advertising. As a former Minister of Financial Institutions, I can tell you that the Ontario Securities Commission, if this were a stock company -- which it is; the shareholders are the citizens of Ontario -- would revoke its ability to trade, and the board of directors of the company would impeach the officers, and for a very simple reason. What they are saying is: "We're not doing anything wrong. We issue our budget. All of the figures are in the budget; they're all there. The mere fact that we don't state them the way an independent person who was put in place to make sure that those figures are stated properly is not our problem, and it's not the auditor's problem because he has no jurisdiction over our budget. When we get to public accounts, we state them properly."
That is a copout. It's a copout by the government side to say that's okay. Let me tell you why. We have a perfect case in point. We have the Treasurer of the province coming before this committee and issuing documents, and I have a copy, balanced operating budget in 1998, and he shows that for 1995-96, the operating budget is going to be $4.3 billion in deficit and the capital budget is going to be $2.2 billion. This is a figure that he has given to this committee and this committee is supposed to be dealing with facts and would expect that the person in the province who has responsibility for looking after the finances of the province would give accurate figures to the committee.
In a news release on February 16, and I have it here, it say, "Ontario capital investment plans for 1995-96 to support over 100,000 jobs." What is the amount? It's $4.4 billion. So the Ministry of Finance is issuing a statement that says the capital expenditures in 1995-96 are going to be $4.4 billion. Less than two weeks ago, the Treasurer appeared before this committee and said, "No, it's going to be $2.2 billion." You say: "Well, it doesn't matter. When we finally get to public accounts, it will all sort itself out."
Let me tell you the problem. The budget isn't just a political document. It is that, but it isn't just that. We don't have a lockup when the figures come to public accounts but we do have a lockup when the budget comes out. We don't have the media and everybody else virtually in the country waiting in anticipation to see what the budget is going to be -- I mean, we do have, but we don't have them waiting to see what is going to happen when they get to public accounts. So the budget document is more than just: "Well, it's our estimate and it's something that doesn't really make any difference. By the time we get through the fiscal period, we will report the actual results at public accounts."
I think it's disgraceful, and for those of you who were here at the meeting when I questioned an official of the Ministry of Finance, I said to him, "You have projected" -- whatever the amount was; it doesn't really make any difference -- "what the deficit is going to be in the budget. Tell me: When you get to public accounts at the end of the fiscal period, if all of your projections are right and if all of your assumptions are right, is that the figure you're going to be showing as your deficit?" And he said, "No." I said, "Is it true, ballpark, because I don't know what the adjustments are going to have to be, that your deficit is going to be somewhere around $2 billion to $2.5 billion higher than you're showing it in the budget?" And he said, "Yes."
What I don't understand is, if on February 6 he can say, "Our figures are not going to be what we're telling you," and he can say now that come 15 months down the road, yes, we will be showing a higher number, why he doesn't show that number now. This isn't a matter, as I said, of political partisanship. It is a matter of fiscal responsibility.
We have an officer of the Legislature, the Ontario auditor, whose mandate is to advise the government, to be the watchdog, if I may, of the citizens of Ontario, who has taken the unprecedented step of coming to this committee and saying: "It isn't a matter of opinion; it's a matter of fact. You are not keeping the books according to accepted standards." He has called on the province to do it and he's called on the province in its budget to show the figures as they are: not as some politician would like them to be, but as they are. There isn't anyone, other than the politicians, who is questioning it.
We've had deputant after deputant come forward and say: "Stop keeping two sets of books. Put forward the numbers, whatever they are, because everybody discounts them anyway." The people in the know know what the real number is because, as the members of the government side are very anxious to say, all the numbers are there. The problem is that to those people who are watching, the citizens of Ontario who don't have the information or maybe the interest or the ability to ferret out all the numbers. All they know is that on the day the budget comes down, when everybody is focused on that particular issue, they look at the figures and they say, "What is the deficit?" and the government, whether it's $8.6 billion or $6.8 billion or whatever it is, gives out the number and the press heralds this number. This is the number, the deficit. This is what the Treasurer stands up and says and everybody is watching it and it's film clips all over the place showing this is the number, when everybody knows it isn't the number. It isn't as if he says, "Look, I miscalculated." They know going in that the number he is putting forward is not the real number. I say to you that this committee would be derelict in its duty if it doesn't recognize that and comment on it.
The other thing, of course, is that no matter what happens, it's going to be in the report. If the decision of the majority of this committee is that it shouldn't be in the report, and that will be a crass political decision, then I can assure you, without even conferring with my colleagues in the third party, in the report that will be appended by the other two caucuses, this will be in there. What you really do is you bring ridicule to the committee, you bring ridicule to the government --
Mr O'Connor: You do. There aren't two sets of books.
Mr Kwinter: The government keeps saying there aren't two sets of books.
Mr Donald Abel (Wentworth North): No, there aren't.
Mr Kwinter: But I'm telling you, a deficit that is reported as one figure and then when it goes to public accounts turns out to be $2 billion higher, when everybody acknowledges going in that that isn't the number, is in fact two sets of books. The auditor didn't come here because he has nothing else to do or he has an axe to grind with any partisan interest. He is saying it doesn't make any sense for the government to put out an interpretation. Let me even concede that you say if there aren't two sets of books, there are two sets of interpretations. He is saying: "Tell it as it is. If you're going to incur a deficit, let's know what the real number is so that at least when we are trying to resolve the problem, we are dealing with the same numbers."
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I would like to hear the rationale -- and I can understand that some of the members of the government side are not happy, but I'd like somebody to defend right now the fact that this document was presented to us less than two weeks ago and it shows the capital deficit for the year at $2.2 billion, a document that was put out by the Ministry of Finance that says we are going to be spending $4.4 billion. Now, if you're spending $2.2 billion in this, and less than two weeks later you're spending $4.4 billion, there is a shortfall of $2.2 billion. How can you discount it? How can you say, "Well, it doesn't matter. There aren't two sets of books, there aren't two sets of numbers. It doesn't matter"? These are put out by the same people.
It isn't as if somebody says, "You know what? We don't agree with the way you're doing it. We think it's this and you think it's that," so you have a dispute and you say, "Well, you can do it your way, we'll do it my way." The same people are putting out these numbers -- $2.2 billion and $4.4 billion -- all within a matter, really, of about 10 days. I'd love to hear someone defend that. Tell me how that happened and tell me how you justify it.
Mr Sutherland: Well, I must tell you, I find this all interesting because I think we've had now about three speeches telling us about what the recommendations are going to be. The discussion right now is to be on what advice we're giving to the researcher. No one said that we weren't going to address in the body of the report the concerns of the auditor. My comments were that I thought it should reflect the comments made by the auditor and the Ministry of Finance's response.
However, since we've gotten into this issue, let's refer back to a few other things, and the question about books. Both Mr Kwinter and Mr Phillips used the terminology "the books" when referring to the budget. The auditor himself, when he was here, clearly said the budget is not the books, the public accounts are the books. So let's be very clear. There is only one set of books: the public accounts.
The auditor, when he first came in, asked that the accounting method for keeping the public accounts be changed from a modified cash basis to this accrual basis. Okay? The auditor recognized the difficulty in changing over from one accounting system to the other, and the auditor, in his presentation here, certainly acknowledged the work that was done by the Ministry of Finance to move to an accrual basis and to put the public accounts on that basis. The auditor would like the budget presented that way.
As you may recall, when the auditor was here and I questioned him, I noted to the auditor that at least six other provinces do not present their budget in the same accounting fashion as their public accounts. That includes provincial Liberal premiers, that includes provincial Conservative premiers, and includes Ralph Klein in that group as well. So to say that somehow this is unprecedented or to make this issue the only issue that this committee has heard about I think is really overstating it.
I should also remind folks that the Minister of Finance did clearly state when he was here for his presentation that he will, in the budget, present the overall financial information as how it will be in the budget and how it will look as a public accounts statement. So the Minister of Finance has undertaken that we are moving towards the direction of what the auditor would ideally like. I think if we look at how the budget information has been presented over the last few years, we see more and more information being presented all the time. It isn't as if we're not going to do anything or not moving in any way towards that direction. Okay?
I think we have to remember too that in terms of the way the Minister of Finance has presented it, the budget has been presented in a similar way for many, many years in this province. If we want to go back and look at each budget year by year and go back and analyse what was actually included in the numbers and what wasn't in the numbers, we can go through that very, very lengthy debate. We could also go back and put the accrual basis to those accountings and to the alleged years when we had a balanced budget. If you did it under an accrual basis, there wouldn't have been a balanced budget in the year that's often cited and claimed, I believe it's 1988-89 that we hear Mr Phillips and others make that.
The point in terms of what advice we're giving to the researcher is this: We're asking the researcher to summarize the auditor's comments, summarize the Minister of Finance's comments in terms of what the issues were. However, in the overall scope of the hearings, of what we heard from many people, there are a lot of other issues that dominated the overall discussion rather than just what the auditor's comments were. So the auditor's comments, rightly so, should be noted in the body of the report.
In terms of what we're going to do with recommendations, as I've stated earlier this morning, at this stage of the game we're not talking about what the recommendations should be, we're trying to give advice to the researcher.
The Chair: Thank you very much, Mr Sutherland. I'd just like to remind all the committee members that we do have a purpose here today, and that is to advise the research officer with respect to how we want to draft this report, and yes indeed, we've been doing some of that. However, I must admit the Chair was somewhat naïve with respect to why we needed this to be televised today. It's become clear to me as the day has progressed why this was necessary.
However, let me say that we have a few speakers left to go and I would just suggest that maybe we keep our comments short and succinct at this point so that we can get on with the most important aspect of this day's work, and that is writing this report. Next is Mr Carr.
Mr Carr: Yes, thank you. I'll be very brief. Monte and Gerry and David did a good job in explaining the reasons. The only comment I want to make is that in 1993, in our minority report dissenting opinion, we talked about this clear set of books. We called it the deficit du jour, and here Kimble's saying that we're moving towards it.
Two years ago in our report we said this is what we'd like to see and we're seeing no action. That's why you're seeing a little bit of anger. In the first line there we say, "The transparency of the government's book was again an issue before the committee." That was two years ago. I remember us raising it -- Norm Sterling was our critic way back -- and that's the problem we face.
I'm not going to get into the details that have already been talked about. The reason the anger and the frustration are there is because we've been talking about this for two years. We called it the deficit du jour, and what we said in our minority report, in our dissenting opinion two years ago was that what we need to do with the books is have a comprehensible, understandable, accessible and realistic description of the assets and liabilities. So I guess that's the frustrating part for us in the opposition for two years.
There were about 15 other recommendations that we put in. I can understand where you wouldn't necessarily agree with some of them, including freezing taxes going back two years ago which, as I look back at the recommendations, you're now doing some of the things we called for. To say, "I told you so," doesn't do much good. But when you see the anger on this side it's because we've been raising this issue for at least two years in the House with the Premier, to the Minister of Finance. That's where the anger is, and now to say that you're moving towards it -- we've been moving for two years.
The other folks have talked a little bit about the reasons why it should be done. I just want to let you know that the reason we're so concerned about this is that this has been raised in our minority reports for two years now and nothing has happened. Now we have the auditor involved, and I'm glad to see that he has come forward to do that. I think he did it reluctantly. It was a big step for him.
If the members on the government side -- and I appreciate what Kimble's saying, that they want to have it in there. I think we need to have a little bit more than what I think you agreed to, which was one paragraph. I think we should have a description of what we would like to see. I think we should talk about some of the problems that have been put together by the auditor because, I want to tell you, the public out there is frustrated with these games that are being played back and forth on this issue.
Let's be clear about what it is. On page 16 of our report we entitled it "A Clear Set of Books." So for two years now we've been talking about this. We quoted one of the people who came before us and this is what the quote of that person was. One witness put it this way, "If you think information is expensive, check the price of ignorance." Two years ago witnesses came before us and said, "Can we please have a clear set of books?" Two years later we are still sitting here, with the auditor involved now saying it, with the concern out there of the people we heard come before this committee. Kimble says they're there. The auditor is saying, "This is how we'd like to see it done." It's not that complicated, folks.
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What has been talked about here today and the reason I'm so angry is similar to what other folks are, because the reason it is being done is because the Minister of Finance is trying to low-ball the deficit for political reasons. Everybody who knows anything about it knows. As we say, it's the transparency of the government's books that's again an issue before the committee. You aren't fooling anyone.
As one small thing we do as a committee, let's reiterate to the Minister of Finance that it's about time, whatever he agrees with, that we come to some conclusion so that the auditor and the Minister of Finance are not before this committee a year from now -- they won't be, because this government's mandate will be up -- so that we aren't fighting for two years over something as simple and as uncomplicated as how the books are going to be kept. It's little wonder we can't agree on what should be done with taxes and government spending; we can't even agree on how we're keeping the books and have arguments for as long as it took this morning. That's the frustration.
Two years ago, we told you simply, "Here's what needs to be done," 15 recommendations. What we said was, "Let's have an independent party to prepare an analysis of the cost and benefits of converting to an accrual accounting to provide an opinion as to whether the conversion would result in a better set of books." That's what we did.
Mr Sutherland: That's public accounts, not the budget.
Mr Carr: We didn't even say, "Listen to us before the auditor gets involved." We said, "Let's have an independent third party who would take a look at it." The independent third party who had to come in is the auditor who is saying, "You are not doing it correctly."
I'm not going to go on other than the fact that I think we need more than a paragraph on it. I want to tell you, the people are seeing through it. It's not right and it should be changed.
Mr Phillips: Just to follow up on it, because it is important -- Mr Carr said some of the things I was going to say -- it was in May 1992, almost three full years ago, that we first raised this issue with the Provincial Auditor. We sent a letter to the Provincial Auditor saying, "We have concerns about the way this budget is presented." Actually, it was the day of the budget, I think, in 1992. And sure enough, for the first time in the history of the province, the Provincial Auditor refused to give an unqualified opinion on the books. In other words, it was the first time in the history of the province that the auditor did not give an unqualified opinion on the books. He said, "This is not the right way of keeping the books."
Then again in the spring of 1993, this same committee, some different members but many the same, made a recommendation in our report to accommodate the Provincial Auditor. Nothing happened. What happened was that we had a budget presented in May 1993 that showed a deficit of $9.2 billion. Just as we predicted, when the auditor finally got the public accounts -- by the way, the public accounts come out 18 months after the budget's presented.
When Mr Sutherland says, "You get the books, the public accounts," everybody should recognize that when this budget is presented in April 1995, the real books, as you call them, the public does not get for 18 months. So the real numbers as you call them are not given to the public until 18 months after the budget is presented. As a matter of fact, it was only in November of last year that we got the real numbers. That's what the auditor calls them -- this is his document -- "budget deficit" and then "real deficit."
We had this debate last year for the third straight year and we said as strongly as we could -- I think both ourselves and the Conservatives attempted to get a much stronger statement in our report, but the statement simply said, "The province's financial statement should be presented in a clear and complete manner and as quickly as possible." But the fact is that we are going to get a budget presented to us, as I say, in April and it won't reflect the real numbers. The government members are telling us the real numbers are in the public accounts, which are only presented to the public 18 months after the budget is presented.
Last year we went through all of this exercise, if you remember, with us feeling increasingly more strongly about it, and sure enough, we got a budget that was presented. This is the auditor coming to us just two weeks ago saying: "The government is showing an $8.5-billion deficit. I am telling you, public, that the real deficit is $10.5 billion." He's saying that, but he says we will not get the official public accounts until October of this year, well after the election, a year and a half after the budget was presented.
Without doubt, unless this committee puts in a very strong recommendation that the budget be prepared and presented using the auditor's recommendations, not that it be hidden in fine print somewhere in the budget where you can get at it with a fine-tooth comb, but exactly as the auditor is requesting, we're going to have another one of these fake deficits where the auditor would say, "You've got a deficit per budget but the real deficit is something quite different." As a matter of fact, that's the language the auditor used, if you remember. He said that the deficit number the government's using in its budget is not the real deficit.
If people are wondering why, as Mr Carr said, we're upset, this is now, I guess, the fourth year almost. We started it in 1992, we did it again in 1993, we did it again in 1994 and here we are in 1995 attempting to get it done. I think we're going to have to be very specific in our recommendations. We're looking to give direction to research, and I guess I'm arguing as strenuously as I can that our direction should be that we adopt the Provincial Auditor's recommendation.
Mrs Caplan: I'm not going to belabour the point, but I would add a couple of things that I don't think have been touched on. Every presenter who came before this committee, who commented on what the Provincial Auditor had to recommend to the committee and what the Provincial Auditor requested, supported the Provincial Auditor.
Mrs Haslam: No.
Mr Wiseman: That's not accurate.
Mrs Caplan: The only people who have not supported the Provincial Auditor are the Rae government, the NDP and Treasurer Laughren.
What we have seen before this committee is the Provincial Auditor, for the first time that I can remember in history, and I don't think a Provincial Auditor has ever made an appearance before the finance committee pre-budget, suggest to the government how the numbers in that budget should be presented. I don't think it's ever happened.
I think the reason that he did that is because he feels so strongly that there is confusion between the budget and the public accounts, which are presented 18 months later, he feels that there is confusion among the public as to what the real state of affairs of the province's finances are and he feels strongly, as a watchdog on behalf of the public, that the government should change its practice in the way that it puts forward the provincial budget.
He has made that recommendation. He has been supported certainly by everyone I've spoken to. I have not had a conversation, I can tell you, with anyone who says the government should ignore the advice of the Provincial Auditor. No one has said to me that they feel the government should ignore the Provincial Auditor's advice, and I take that very seriously.
Mr Wiseman: Well, you're wrong.
Mrs Caplan: How can I be wrong? I'm telling you that every person I've had a conversation with --
Mr Wiseman: Because it's right here in Hansard that you're wrong.
Mrs Caplan: -- says that you should follow the Provincial Auditor's advice. No one says you shouldn't listen to the Provincial Auditor.
No company, no business that is responsible and accountable to its shareholders would be able to get away with the shenanigans that the Rae government has been attempting in its disregard of the advice of the auditor. Any company, any business, that disregarded their auditor's advice would be penalized. They would be fired by their board of directors, by their shareholders.
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I say to the government and I say to this committee that I believe this report will be absolutely of no significance unless we recognize how important it is for the government to present its budget in a way which is acceptable to the Provincial Auditor, which follows the Provincial Auditor's advice. I appeal to the government members to consider the interests of your constituents, the shareholders and the taxpayers of this province, the citizens of Ontario, and let's make this report to the Treasurer mean something. Let's make a difference. Let's make sure he knows how important we feel it is to follow the Provincial Auditor's advice.
The Chair: I don't know if it's appropriate, so I'd like to put this to the committee. I do know some things that have happened in government that none of these committee members would know. I'd like to share that, because it's germane to what we're speaking about, but I don't know if it's appropriate. I'll let you think about that, and Mr O'Connor's up next.
Mr O'Connor: It probably is most appropriate, Mr Chair. Thank you for yielding the floor to me after three speakers from across the way.
We need to take a look at exactly what is being discussed and presented here. I certainly do appreciate the fact that the NDP government hired this Provincial Auditor, who has taken this proactive approach to actually come before the committee. They're right, we've got one taxpayer, and for too many years we had to sit back and -- well, look at the last Liberal government that was in power here in Ontario. If they were to have done as Mr Peters, our Provincial Auditor, is suggesting, we would in fact have had deficit situations through all those times even when they said they had balanced budgets.
The reality is that my former employer, for example, General Motors of Canada, operates in a procedure very much like what the province is now operating in, and I don't think anyone is ever saying they're totally a disreputable corporation. In fact, I think they're still what could be referred to as a blue chip stock likely. They're a good corporation, making money -- ups and downs with recessions, as recessions go.
Let's try to make this a little bit easier for those watching. I'm glad Mr Carr wanted us on television today because it gives us a chance to explain things in a bit simpler terms.
For example, I've got an income that comes in once a month, a paycheque that comes in, and I've got bills. I've got my hydro bill. Thanks to the NDP it's been frozen for two years in a row; it never happened before. But I've got a hydro bill that comes in every month. I know how much that's going to be -- maybe; I don't know for sure, because it's consumption. I've got a telephone bill, a cable TV bill, a car payment, a mortgage payment, insurance, heating oil. I can, at the beginning of the month, project what my costs are going to be. I can sit down and try to figure out in a ballpark range what it's going to cost me for the whole year, and then I can maybe plan a summer vacation, take my wife and son and go someplace, maybe consider a trip to Canada's Wonderland with Patrick, my young lad.
But all of that you can put in a projection. You call it a budget. I don't know until I actually pay these bills how much those bills are going to be. I can't say today what my hydro bill is going to be next month because I don't know how much the lights are going to be on -- the days are getting longer -- and it's warming up a little bit, so I may not need to use the clothes dryer quite as much, or the heating oil; maybe the furnace isn't going to be on quite as long. But I can't say for sure what it is.
Now, there may have been some magic in the days when the Tories and the Liberals were government. They may have had some magic wand they could wave: "I know what the public accounts are going to look like because I can come up with a budget that's going to be the very same as what the public accounts are going to be in 18 months." It's going to take a while for the bills to come in. I'll tell you, when I go and do a bit of Christmas shopping and put it on my Visa card, I don't know the next day what that amount is going to be. I've got to wait for the bills to come, and sometimes you forget about some of the bills until you've got them all added up, and then there's interest. You can't project all of that. You can't project your heating costs. It's not possible.
There are some things you can define as what are going to be the costs, so we budget a certain amount. We budget a certain amount for groceries. At the end of the year, when you add it all up, if you refer to it as our public accounts, they may not reflect the same. I don't think they did in the Tory years or in the Liberal years. In fact, if we were to go back to those years and use the accounting procedures that are being suggested by our new Provincial Auditor, the one the NDP government hired, they wouldn't have had the balanced budgets they pretend to talk about and refer to sometimes, quite proudly. The fact is, they didn't have balanced budgets. Yes, they had a budget book; they tabled a budget once a year. They tabled a budget and projections of what the costs were going to be, and, lo and behold, at some time down the road the public accounts came out. The two weren't always identical, and I would hasten to guess if they ever did balance, between the two of them.
I'm not suggesting that the Liberals or the Tories cooked the books when they were in office. Far be it from me to suggest anything like that, because that wouldn't be the case. No doubt they probably had some situations where borrowing costs might have been a little bit higher, because we know they didn't have balanced budgets all the time. There are economic cycles we go through, like the recession we've just gone through, and no doubt they couldn't have predicted the amount of job loss that would happen in the industrial heartland of Canada as a result of this recession and the job loss that would go so deep as a result of trade policies, how much of the economy would go underground because of the GST. Those are not the kind of things you can predict easily.
I'm glad we've finally got a Provincial Auditor, hired by the NDP government, who wants to be active -- maybe a little bit over-critical at times, no doubt. In fact, Mr Peters and I sit on the public accounts committee, so we certainly have all kinds of wonderful opportunities to discuss back and forth. In fact, I like to consider Mr Peters as an equal on our committee. On the public accounts committee, he sits at the table with us an equal on the committee, and we work in a very cooperative fashion. Unlike this committee, the public accounts committee is much less partisan. This seems to be more partisan than is probably necessary.
But in putting together this report and trying to define some guidelines for our legislative research officer, I think, yes, there needs to be a section put in here with the comments of the auditor, who was hired by the NDP government. I welcome his new approach. It certainly is a bit different, and it would have been interesting if he had been here 10 years ago and had a chance to comment on the books of the Liberals, or maybe even go back a little further and comment on the books of the Tories, who in all those 42 years never had a balanced budget.
Let's deal with the reality of today. Let's not try to say that the budget is one set of books -- it's a reality, it's projections -- and the public accounts is a different set of books. There aren't two sets of books. Contrary to what people are saying, there aren't two sets of books.
The reality is that if we take a look at the financing approaches, one that General Motors follows, it makes sense, makes some sense to borrow on the equity we have and use that, put it to work, and to make sure we take a look at what the needs are of the people of Ontario and try to meet those needs the best we possibly can.
I guess sometimes we try to overcomplicate things. What I'd suggest is that we try to take some of the issues and make it a little easier for people watching to get a little better understanding. As my friends suggest we should be on television, it certainly provides that opportunity for the people.
The budget is going to be a projection of cost. We've gone through the committee hearings. We heard from the Provincial Auditor; he came to the committee. Following that, we had the Treasurer of the province come before the committee. We had the Provincial Auditor suggest, "I'd like to see this included in the budget." When we had the Treasurer come before the committee, the Treasurer said, "It hasn't been done before, but we'll see what we can do."
But even the auditor, when questioned about whether the body the public auditors belong to, PSAAB -- when they sit down and try to define how they'd like the books to be done, they can't even come up with a good recommendation. The public auditors among the public auditors can't even come up with consensus, so it's no wonder that in a partisan forum like we are here in this committee room we can't necessarily come up with an agreement.
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That's why, as has been pointed out, we have dissenting opinions appended and tabled at the same time as the committee report. There are going to be some things that all of us agree on that are going to be part of that report, and hopefully the research officer is going to be able to use the information we present. Where we disagree, I think it's most important that we do get that dissenting opinion tabled at the same time so we can hear the different views, because certainly we can't agree on everything. It's likely not going to happen that often; it's going to happen once in a while.
For the bulk of the report I think we're going to see that we all do agree. For the majority of the presenters who came forward, we're all going to find something in what they presented to us as good points to be included in that report. People have written us, taken the time to write a brief and send it off to this committee, and we've had a chance to review it. Some of what we're going to be talking about is going to be reflected in that opinion as well.
To the legislative research officer, on this point we've been talking about for a great deal of time this afternoon -- in fact, Mr Phillips started the discussion this morning, I believe -- I think we should have a part in there that reflects some of the comments of the Provincial Auditor. But he wasn't the sole presenter here. I think that opinion should be put in, and we should make sure we try to get a balance and reflection of what everyone else presented.
Mrs Caplan: And note that most people agreed with him?
Mr O'Connor: That not everybody did agree with him, though a good number of people did agree with him.
Mrs Caplan: Most people agreed with him.
Mr Sutherland: I just want to make it clear. Mr Carr talked about going back three years, Mr Phillips talked about going back three years. Again, at that time the concern was about the public accounts and dealing with the issue of the public accounts. That issue of dealing with the public accounts has been addressed, as I indicated. As to budgets, there are six other provinces -- Tory governments, Liberal governments -- that do not present their budgets in an accounting fashion that is similar to how they keep their public accounts, whatever they've chosen.
The advice I want to recommend to the researcher again is that obviously there is reference to the issues the auditor has raised in terms of his concern about presentation, and comments from the Minister of Finance.
In respect to question 2, do we like the table prepared and presented by the auditor, I don't think that table needs to be included. The auditor has made his comments known on those issues before and it's not new information. I don't think it needs to be presented in table form. If there's some reference to some of the things he said in the comments section, that would be fine.
Finally, I think we should have a summary of the comments about the change in the public accounts and the changes to accrual accounting. If I recall, I did say earlier this morning that since that issue was kind of done, we wouldn't need to pay a lot of attention to it, because it's just more or less summarizing what's already occurred rather than commenting about new issues. So in terms of number 3, we probably wouldn't need a lot of time on that.
That would be my suggestion in terms of how to proceed on this issue: a summary of the comments of the auditor; a summary of the comments of the Minister of Finance; I don't think we need the table; and then probably a paragraph to summarize question 3 that the researcher has presented.
Mr Kwinter: I just can't leave unchallenged a couple of the comments that have been made by members of the government side. To put it as kindly as I can, it's supposed to be enlightening and in fact it's really misleading.
Just so my friend Mr O'Connor will know, when he comments about the fact that this is a budget and there are lots of things we can't predict, what happens is that the Treasurer issues a quarterly report and says how he is on budget, lists every single expenditure, lists his revenues, says we're either up or down, shows what the difference is, and that goes right through till the end of the fourth quarter. There are no surprises in that area. But what has happened, unfortunately, is that I don't think the government members understand the issue, and I say that kindly.
What we're saying is this. If you're debating whether we should use the accrual method or whether we should use the cash method, I agree, that's a matter of opinion. As Mr Sutherland has said, there are four or five other provinces that have said, "We don't agree with the way you're doing it," and I have no problem with that. I mean, I have a problem personally, but I have no problem if the government says: "We're sorry. This is the way all the previous governments have done it and, notwithstanding what the auditor says, we are not going to do it." I have no problem with that.
Where I do have a problem is where the government says, at public accounts, "We have agreed with the auditor and we have reported the way the auditor has suggested," which is what happened in 1994-95, which is what we're doing -- where I have the problem is, after having agreed that, "Yes, notwithstanding that we haven't done it that way in the past but we're doing it now," you still report your budget in the old way. That makes no sense.
If you were going to say, "Sorry, we don't agree with the accrual method and we're not going to report that way," I'd have no problem. As I say, I might have a problem, but that is not the issue. When we use the term "two sets of books," that is a misnomer, I agree; all the figures are there. But the way it's reported, it's reported in two different ways, and that is the issue. The government has made the determination that: "Yes, we are going to show our accounts at public accounts under the accrual method. That is the way the auditor wanted it. The auditor has signed off unconditionally; he says that's fine. But notwithstanding that, we are going to go to the old method of projecting our budget." That's what doesn't make any sense, and I defy anybody to justify it.
Mr Sutherland can say there are six other provinces that do it. There isn't one other province that does it. There are six other provinces that don't use the accrual method. I agree with that. But once you make the decision that you are going to use the accrual method, surely you have an obligation to project your budget so it conforms to the method you're using. You can't have two different ways of reporting: one that you've agreed to at public accounts and another that you've agreed to at the budget. That is what the issue is all about.
Mr Phillips: To comment on something Mr Sutherland said, just to assure you, I think you said the debate in previous years had been around getting the public accounts right. From our side, it's never been about that. It's been about getting the budget reported in a way that reflects reality. In fact, we were very specific last year in our recommendations to say, "We understand the government is going to report the public accounts the way the auditor wants them," but that's not what's important, because, as everybody I hope now knows, the public accounts come out 18 months after the budget's presented.
I will absolutely guarantee you this. When you present the budget, the headline in the paper will be whatever you call the deficit, and the deficit will be I think what you've got in this book. I don't have much doubt that we've pretty much seen, by and large, the budget, how you'll present it. You'll show a $6.5-billion deficit. You'll say: "The deficit is going down from $8.3 billion. We're on a nice, even track. Everything's just fine." That will be the public perception.
I guarantee you that the analysts, the people who make money on trading on our currency and the people who make money on understanding the real financial wellbeing of the province -- and big money is made on this stuff. This is what they get paid for, to watch the real budget. Money is made around the world on the basis of the real numbers. I guarantee you that every significant analyst will be putting out the real deficit for the traders and will say, "Today's budget was reported at a deficit of" and it will be $6.5 billion. I suspect you'll probably try to do a little bit better, "Government surprises public with a deficit of $6 billion" or something like that, but the people who understand the numbers, as they did last year, will very quickly, in a matter of minutes almost, publish the real number.
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This was one of the auditor's major recommendations. This is what he was so strong about. He said: "Listen. The people who can really make money on this understand it. The public isn't being given the numbers." That's why he alerted us in his presentation. He actually gave us a little chart to show what the comparison will be. This deficit that's in this book here at $8.3 billion, this little headline, "Ontario's deficit down by 30%," well, the auditor is telling us that this number is not $8.3 billion, it's $10.7 billion.
Mr Sutherland: It's still down by 30%.
Mr Phillips: No, no. Just so people know, one of the government members said the deficit's still down by 30%. Actually, unfortunately, it's not. If you accept the auditor's recommendation, the deficit is not down by 30%. The deficit is down by maybe 10%, 12%, and that's the auditor's point.
I will just say to us, if we don't get the budget reported properly, there will be two numbers that day. The first number will be the one that everybody reports. I've no doubt you can almost write the public budget right now, and then all around Ontario the people, as I say, whose job it is to understand the value of the currency in Ontario will do their own numbers and they'll say, "I'm sorry, it's not $6.5 billion." In fact, we got the first tip today. We know what will be reported in the capital budget in the province of Ontario: $2.2 billion. That's what will be in the budget. In fact, the government has it right here: $2.2 billion in capital. That's what this says, $2.2 billion.
The Chair: Mr Phillips, I find it difficult to interject when you're making good points, but I want to remind you that these points have been made at least half a dozen times and we're getting very repetitious.
Mrs Haslam: You must have enough footage now to send out to your constituents. This is getting ridiculous.
The Chair: The role of the Chair, I must remind you, is to move along the business of the committee, and we have heard these comments repeated at least, I believe, six times now. I'm not saying they're wrong or right; I'm just saying they have been mentioned.
Mr Phillips: I'll just close by saying how important it is for us. I realize that the research officer is going to have to draft some language for us and then we'll have this debate when we're looking at the recommendations.
Mr Wiseman: I've been sitting here listening to all of the comments about whether or not this is going to be reported and how it's going to be viewed and whether the question is this number or that number.
When the budget is produced, there are more numbers in there than just the two that we've been bandying around. For example, it starts out with a column called "Financial Transactions" where they talk about the revenue. It even shows the fiscal revenue and outlook for the last 10 years. Then it goes to operating expenditures, excluding the public debt interest, the public debt interest being the interest we have to pay on the accumulated debt.
Then it goes to public debt interest and then it goes to the operating deficit or surplus, and according to the auditor, there have never been any surpluses. So even by using the Provincial Auditor's yardsticks, the so-called surplus of the Liberal government that they are so proud of just disappears into vapours with that.
Mr Phillips: I'm sorry. What's the reference document, just so I have an idea?
Mr Sutherland: Page 118 of the budget from last year.
Mr Phillips: I'm looking at that. I see surplus, surplus, surplus, surplus, surplus, 1987-88 --
Mr Wiseman: You see it under operating surplus.
Mr Phillips: Yes, I see that.
Mr Wiseman: It seems to me that what's happened there is that the previous governments have separated operating from capital in order to show a surplus. When you add them together, which I think is what the auditor wanted everybody to do, which happens later on down in the columns, then you can see that the budget has a considerable amount of detail, "Accumulated budgetary requirements" and "Net financing." It means how much we have to borrow. "Provincial purpose debt" excludes Ontario Hydro and all other contingent liabilities -- whoa. You mean, we didn't put it all in there before? My, how could we have been so negligent in the past?
Then it goes on to "Gross domestic product at market prices," and I assume that's in there to show the state of the economy in terms of how well it's growing on the basis of all of the indicators being added together to create a gross domestic product.
"Personal income": How much was the total income from the people of Ontario?
"Population": I assume that that's an important figure because it allows people to figure out how much the average income is and allows them to figure out what the total debt per capita in dollars is. So there's going to be a number there.
"Personal income per capita" in dollars. That's your average.
"Expenditure as a per cent of GDDP," "Public debt interest as a per cent of revenue," "Total debt as a per cent of GDP," "Cumulative net borrowing for Ontario Hydro," from the United States, I guess, US markets, and from the Canadian pension funds, and the "Contingent liabilities," mainly from Ontario Hydro. From the looks of this, I've got more numbers here than I think that we've been talking about. I don't think we're hiding anything. If you go through these numbers, this is a whole panorama of information about the state of affairs of the economy of Ontario.
If you care to do a little bit of math, you have an opportunity to define and find out everything that is happening in the province of Ontario. If this chart isn't enough, there are charts on the preceding five or six pages and four or five pages beyond that. So there isn't any attempt to hide any of this.
If you go back and you do a little analysis of previous budgets and you look at projected revenues and then actual revenues and you do a comparison, what you'll find is that they're off; they're not correct. If you go back and you look at projected expenditures and you compare that to the actual expenditures which are finalized in the next year's budget document, in this budget year's document the numbers for 1994-95 will be put in as an interim number and then in the next year's budget they will be put in as an actual number. You will find that these are often different, and that is because the budget, as my colleague Mr O'Connor said, is an attempt to project what is going to happen and how it's going to evolve.
For example, I think it's interesting to note that in the third-quarter presentation by the ministry there seems to be a revenue increase this year of about $209 million, and this revenue increase has been put against the operating deficit, according to the third-quarter numbers, to show that the operating deficit is going to be lower than was projected in the budget. So all of that $209 million in windfall revenues has been applied by the government to the deficit. So the current outlook -- be careful how you phrase that, so that people can understand -- for the operating deficit is $6.139 billion, $209 million less than it was projected in the budget plan that was put forward in the budget.
Mrs Caplan: You are defending the indefensible.
Mr Wiseman: The point I'm trying to make here is that all the information is here, that to go back and analyse the previous budgets, you will see that the information is always all there. It's all added up. There's nothing hidden anywhere. In fact, there are lines in the budget that say "Excluding capital costs" from such and such and so on. There's nothing hidden here.
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In fact, I would like to point out that the way the budget is being done in terms of separating capital from operating is exactly what a large number of people in this province have been saying we should be doing over a long period of time. The one that stands out in my mind, of course, is the Ontario Road Builders' Association. Mr Arthur Ryan came in and said:
"If you have a capital investment, the government has to operate -- and I'm an accountant by profession, so I can make these statements with some credibility. In a normal private sector industry, when you have a capital investment, you write off, on a diminishing balance or an amortization basis, the cost of that asset. There's nothing wrong, in this economy today, with doing that."
In fact, he goes on to say that he's very pleased that this government finally listened. Even though he made those recommendations to the previous governments, they did not do that. He says:
"You know, I think you had a representation yesterday from the Treasurer and from the auditor general, and there was some comment about what I guess the auditor general termed to be off-book accounting relative to capital investment. Frankly, our association has promoted that concept for many, many years. It promoted that concept with David Peterson.
"We have a strong position to take in the sense that when you are making an investment of a capital nature, any administration, whether it's NDP, provincial, or a PC government, has to differentiate between expenditures made for operating expenditures and capital investment."
He goes on to say with reference to the auditor: "I think he's totally out in left field, frankly. My two sons are chartered accountants and they work for that government. Anyway, that's my view."
So we don't have the kind of level of consistency in terms of representation from the --
Mrs Caplan: You are defending the indefensible.
Mrs Haslam: You were wrong.
Mr Wiseman: Mrs Caplan and the opposition say we're defending the indefensible.
Mrs Caplan: You are.
Mr Wiseman: Well, let me tell you that when I look at the way the Liberals did their budgets for the last 10 years, the way you had revenue coming in with your increases every year of between $3.5 billion to $4 billion, the way you spent it, the way you ran deficits, the way you did your books, the way you do your books here now where you run deficits in your own books in your caucus services and you can't keep a record of that and you run a $339,000 deficit and then you go to ask for that to be given back to you and forgiven, I can't believe that you can sit there and tell the people of Ontario that you know how to do the books, because quite frankly when I look at the books for the last five years, when you were the government, you spent faster than it came in, you left huge increases and you built in costs that are just unbelievable. So when I say --
Interjections.
Mrs Caplan: They always attested to our books. The Provincial Auditor never refused to give us an unqualified statement.
Mr Wiseman: Anyway, my point here is that if there's some question about the level of information in a budget, there is ample information in the budget document, and I think that when we see the budget, most people will agree that the information they need to make decisions and find out what's going on will all be there.
The Chair: I'll remind the committee members again that we are not complete with respect to "Economic and Fiscal Policies." We still have a couple of speakers. We haven't dealt with "Sectoral Issues," we haven't dealt with "Social Issues" and we haven't dealt with "Transfer Recipients," and I would suggest that, in my opinion at least, "Social Issues" are probably one of the most important issues we could deal with today and we haven't even come close to getting there yet. We still have to hear from Ms Haslam and Mr Phillips one more time.
Mrs Haslam: Oh, not Mr Phillips again. I just wanted to say, I think we have talked this thing to death. We are supposed to be giving general directions. If we want to get on a platform and do this again tomorrow under our recommendations, fine. I'm going to make a suggestion that we get on with the general discussions now and go on with "Sectoral Issues" and deal with what we came here to deal with, and all this parading has just got to stop. Let's get on with what we have to do.
The Chair: I'd like to get on with "Sectoral Issues," but the research officer, Ms Campbell, would still like to ask a couple of questions with respect to more detail with respect to "Economic and Fiscal Policies."
Mr Carr: You haven't heard enough, Elaine?
The Chair: And yet we still would like to hear from Mr Phillips.
Mr Phillips: I won't be controversial. Just that Mr Wiseman I think was using this chart, and it illustrates the problem we have actually, the chart, because if you add the four deficits up from 1991-92 to 1994-95, you accumulate those deficits and the total is $40 billion. But then if you look down two lines to how much money have we actually had to go out and borrow in the marketplace, it's $48 billion.
Mr Wiseman: Refinance.
Mr Phillips: He says, "Refinance." It's net financing. We have borrowed $8 billion more money than we've reported spending and most of that, according to the auditor, is as a result of moving things off the books. So the numbers you quote there, that's our point; that's what begins to signal to the financial community that the province is actually borrowing $8 billion more money than it's reporting spending. It must be going somewhere. There's lots of net financing going on, but this is net incremental borrowing. So the debt went from $42 billion to $90 billion and the deficit went from $38 billion to $79 billion. There's an $8-billion difference. That's all I'm saying.
The Chair: I'd like to let Ms Campbell pose the questions she needs to in order to get the necessary information to conclude the "Economic and Fiscal Policies" portion of this report.
Ms Campbell: I'd like to summarize what I take as the general directions that have been provided to this point. It's my understanding that the members are agreeable to the three themes that appear in the outline: provincial deficit and debt, taxation, and private and public sector partnerships; as well as some new themes: job creation, unemployment, non-tax revenues and the issue of regulation and red tape.
I have some specific questions related to two of the initial themes. The committee members are agreeable to the bullet points that appear under the heading "Provincial Deficit and Debt." Of the questions that are found under there, the first was, "Would the members prefer that the auditor's concerns precede those of other witnesses?" I've heard one comment that yes, they should. Is that the general consensus of the committee?
Mr Sutherland: I don't think it really matters.
Mrs Haslam: I don't think it matters.
Mr Sutherland: They're all going to be in there.
Ms Campbell: With respect to the second question, "Would the members like the table prepared and presented by the auditor to be included in the report?" I heard conflicting responses to that.
Mrs Caplan: Yes.
Mr Sutherland: No.
Mr Kwinter: Yes.
Mrs Caplan: How can you say no? It's part of his presentation.
Mrs Haslam: No.
Mr Wiseman: No.
Mr Sutherland: Well, we're not putting in all the charts and graphs and every table that we've prepared from every group. So, no.
Mrs Haslam: It's a generalization.
Mr Kwinter: Okay, we'll put it in ours.
Mrs Caplan: You leave us no choice.
Mr Sutherland: There you go.
Mr Wiseman: Like it's the end of the world if --
Mrs Caplan: Well, then why wouldn't you include it?
Mr Sutherland: Some of those comments will probably be referenced in the general section.
Ms Campbell: There's a third question related to the auditor's comments relating to the amount of detail that the members would like included. Is it the desire of the committee to just have an overview of what was presented to the committee by the auditor or is there a need to provide some background and context to his presentation?
Mr Sutherland: Are you on point 3? I think it's fair to put some reference to the comments the auditor made about where we were in terms of before, when we were at the cash basis, and now we've gone to the accrual basis, and a quick summary of that.
Ms Campbell: With respect to the heading "Taxation," the committee is agreeable to the bullet points there plus a reference to the public frustration that people felt was expressed during the hearings and what they've heard outside of the context of the hearings. There was also a request made for specific references to the issue of property taxation, specifically education and assessment issues, and also the employer health tax and other payroll taxes and premiums.
I have no more questions related to "Economic and Fiscal Policies." I guess the next issue to be dealt with is "Sectoral Issues."
Mr Sutherland: Mr Chair, just before we go on, because it's related to this issue, during the hearings I believe it was the CFIB who had some concerns expressed about the chart we put forward on payroll tax comparisons from different jurisdictions. One of the issues I believe they brought forward was that we weren't including workers' compensation costs in those. As a result of that, the ministry was asked to give us some clarification on how that chart was done that came up with that, so they have presented a two-pager here and I would just like to table that for distribution for members of the committee.
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The Chair: Thank you, Mr Sutherland. The next portion of our event today is "Sectoral Issues."
Ms Campbell: I'll just briefly read the comments under this issue. "As in past years, the committee heard from representatives of many of the province's economic sectors." And what we have listed below are the sectors that were represented in the hearings.
There has been some general discussion surrounding sectoral issues this morning and perhaps earlier this afternoon. I have the sense that there are perhaps a couple of possibilities here. What is suggested in the outline is that the sectors be discussed separately, some perhaps be merged, or there be a focus on points of commonality in some sort of general overview.
I had the sense that there were some members of the committee who would like general issues raised by the sectoral representatives incorporated with the "Economic and Fiscal Policies." I've also heard that there are some members of the committee who would like to keep the specific sectoral headings and have some discussion about the sector-specific issues raised by each of those groups.
Mr Carr: On that point, I know we had some discussion this morning on leaving somebody out, and I think that's difficult to do. What I'm going to suggest is not talking about some the problems, but one of the things I think might be helpful -- and again the problem with doing that is I think we have to be delicate in doing it because it may leave the perception when you don't talk about other sectors that they aren't doing so well. But the one thing that I think we may be able to agree on and what I was impressed with, maybe coming from Oakville where Ford is, when the motor vehicle manufacturers came in, is the fact that we are in some sectors doing very well, the automotive being one.
I don't know how we can delicately do that without leaving the other sectors appearing to maybe be not doing so well. But I think to put a positive note on it, these reports are often negative, and if we can somehow get in there about how well we're doing in that sector, because quite frankly, as I said during the deputations, and I think we all agree here, had the automotive manufacturers not been doing as well as we have been doing with our exports, 90% of which are exported to the US, our economy would be in real, real rough shape. And I don't say that as somebody from Oakville with Ford. I think even the Minister of Finance recognized that.
I don't know how we'd do it without raising one group above the others, but I think somehow we may want to show that there are some sectors, and we may even do it by not naming the automotive manufacturers by name. But I think somehow what Elaine can do is to show that there were some good things that came forward with what we are doing here, that it isn't all doom and gloom, that, as I said to them, we compete with the Americans, the most powerful economy in the world in automotive, probably the biggest sector in the world, and we beat them. We produce cars faster, better and cheaper here in this province because of the great, skilled people we have.
If we can somehow get the research officer to incorporate some of the good things -- I maybe honed in a little bit on the motor vehicles because that impressed me particularly and because it's a strong part of our sector. But if we could add something positive along the lines, and if I could even make a suggestion, showing that the reason they've been successful is because management and labour, the worker and the employees, have all got together and decided: "To heck with the governments. We're going to be successful." I think if we could put something in there very positive about what is happening, either in the broad sense, in this economy to show the people out there that in spite of everything there are some good-news stories and that it isn't all doom and gloom and that we do have some sectors that are competing, thriving and doing well.
So if I could just add that, and I don't know how we could do it. I would appreciate any other comments with any of the other members to do that, but I think there could be a consensus that that might be a good idea, to show that in spite of everything we still have the best employees and workers here in the province of Ontario. If we could do that, I think that would be helpful.
Mr Sutherland: I think that's very important because auto parts and auto manufacturing is the largest industry. I guess the only thing I would take out of what Mr Carr has said is that --
Mr Wiseman: We're doing a good job.
Mr Sutherland: Yes, I think I want that quote definitely in there: "Gary Carr says the province is doing a good job in auto."
Mr Carr: The automotive sector's doing well in spite of you.
Mr Sutherland: I really do want to take exception to the one comment about saying that somehow government hasn't played a role in that. I think it's very clear that while the auto industry and the workers have done a very good job, there's no doubt that government has been involved in a lot of the different areas.
Mr Carr knows that even in his own plant, the Ford plant, both commitments by the previous government and this government -- and I can think of all the others: the CAMI plant in my own riding in terms of commitments made by the previous government; the Toyota plant had commitments, their new engine plant had commitments, the new assembly plant didn't. But all along, with a lot of it, there is a role government has played.
I don't think you can totally exclude and say, "In spite of government, all this investment is going on," because government has played a role. I give credit to the previous government for getting some of the ones here, and some of the new expansions that have occurred have occurred since that time. Government has played a role.
Mr Carr: What I would like to do is beg to differ on that, and I'll just give you a quick point: I was at the opening when Floyd Laughren stood up and tried to take credit, and it was $7 million of $1 billion. I want to tell you the lights were off and 2,500 employees at Ford booed Floyd Laughren. They booed Buzz Hargrove because Buzz Hargrove got up and started going on about the free trade agreement, with 2,500 employees saying: "Ninety per cent of our cars are going to the States. What are you talking about?"
One thing that struck me, in looking at this, was that there was one person who was cheered, and I will say this: They introduced the mayor, they introduced the chief of police, everybody got booed. Floyd got booed the most and, as you do in all these, he mentioned the Premier's name and he got booed. The one guy who got cheered -- there were actually two: the union members who were on the committee. Buzz Hargrove got booed because he tried to blame all our problems on free trade. The union members who were on the committee that made that decision got cheered, and this would have never happened five years ago. The other person who got cheered was the president of the company. You know what he did? He stood up and he didn't try to take credit. He didn't say it was the government that did it. He said: "You know why we got this? It was because of you people."
So I would beg to differ. I know you in the campaign are going to try and say the $7 million, when you cut the ribbon there, was the reason you got it. Quite frankly, the $7-million cheque, Ford said, "Great, we'll take it," in $1 billion. I beg to differ, but I want to tell you the degree of support that would be there, and the $7 million was a drop in the bucket compared to the reason we got it. In the overall scheme of things it had absolutely nothing to do with it, because quite frankly this investment probably even predates you. Monte Kwinter can probably speak on this. It goes way back.
I will tell you some other things that Ford tells us in private that I probably -- well, I won't share with you. But I want to tell you I cannot put in there anything that says that the reason we got the investment in the Oakville plant, as an example, is because of this government, because I want to tell you, the 2,500 employees -- not me -- who booed Floyd Laughren and booed Buzz Hargrove and cheered the president of the company, the people who they agree did it were the union members who were on that committee with management. That's who we have to thank in all this instead of making it political. I don't want to be negative towards the government -- let's say it's neutral -- but I couldn't agree to anything saying we've got the auto investment here because of this government, because I think --
Mrs Haslam: What you were saying was governments had no part to play, and what we say is that it's not correct.
Mr Carr: What I'm saying is that in our particular case, and I can't even speak about the specifics of Windsor, but that anecdote about what happened, and it doesn't matter what you or I think, the employees who are there, the 2,500, a lot of whom I happen to play hockey with and talk about, we've had many discussions on this. They know that the reason they got that investment is not because of any government giving them any type of grants; it was because the employees and the management got together and said, "What are we going to do?" That's what I want to make clear. Let's not try to play politics with this particular interest. Let's give the credit where --
Mr Sutherland: Even you've got to laugh at that.
Mr Carr: I'm not even going to get into the negative parts about what they say in terms of what the investment would have to be over the next little while if they knew an NDP government was going to be in because, I want to tell you, I could got political and tell you exactly what they have said.
Mrs Haslam: You already have. That's what we're laughing about.
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Mr Carr: What I think we should do on this particular issue is give the credit where the credit is due, and it is not the government and it had nothing to do with any of the government officials there. It has to do with our workers and the management that got together, and that's the reason we got that investment.
I thought that would be one issue we could praise our workers for. I cannot agree with giving the government any type of credit, because it does not deserve the credit. That investment came in spite of you. That I will be political on because I want to tell you very clearly that investment had absolutely nothing to do with this government.
The Chair: While we're not being political, Mr Wiseman.
Mr Wiseman: I'm not going to be political about this at all.
Mr Carr: I thought that was going to be non-partisan. We could all agree on the workers doing a great job.
Mr Wiseman: When you read through the articles in the magazines, the Economist and Fortune magazine, periodically Fortune magazine will run an evaluation of the top cities for investment in North America. They leave out Canada most of the time because if they didn't, then all the Canadian cities would be in the top 10 and they wouldn't have any room for any American cities.
They talk about quality of life as being one of the most important issues. They talk about the facilities in terms of infrastructures and transportation, the ability to transfer products quickly. They talk about lifestyle, things like crime, the availability of a good educational system, the availability of good health care. They rank all of these things together and then they decide which area they're going to classify as being one of the best places to invest.
When you put all of those together, when you consider the crime rate and you consider the educational possibilities and the quality of education, what comes out is that Ontario and Canada are the best places in the world to invest based on where you could send your management and staff in order to have a good quality lifestyle and quality of life. Ontario does very well.
We have to ask ourselves, why is it that this happens? It doesn't happen by accident. It has to do with the fact that we have a different style of government, that in the United States most of the cities, the downtown cores of the American cities are just falling apart and collapsing, that the crime rates in these cities is horrendous. It has a lot to do with the lack of availability of jobs, the lack of the availability of health care.
Our health care system, for example, is one of the reasons we attract a lot of industries to Ontario. It's because there is a margin of competitive edge in Ontario because of the health care system and because of the way we do it. In the United States that doesn't exist. There are a lot of people who don't have health care.
Another thing -- and it's too bad Mr Carr isn't here; I just want to be quite blunt -- and it's too bad there aren't others here -- but when I went to the Clean Air Act presentations in the United States, in Washington, DC, the Clean Air Act and the fleet emission standards are a very important reason why we have large engine production in Ontario. The fleet emission standards and the penalties involved in that mean that they cannot produce the large engines unless they have small engines to compensate and average out the fleet air emissions. So Ontario is going to do well because of that. There has to be investment here in that regard.
When you look at the workers and you look at the training and the ability of the Ontario workers, people always say that the Canadian worker, the Ontario worker, is one of the best trained, one of the most productive and one of the best equipped to be flexible in the workplace and make the kind of changes and adaptations that are necessary. We heard from a large number of manufacturers about how they are able to have a well-educated workforce doing different products on the same line because our workers can read and can write and can do the kind of work that is necessary.
To say that government doesn't have a role in that, I would disagree with it. To say that the philosophy of the government in power doesn't have an impact on that, I would also disagree with it. Because if you look at the non-interventionist, right-wing policies in the United States that have led to the deterioration of the inner cities and the inner cores of the United States and to an education system that has one of the highest illiteracy rates in the world in terms of Third World levels of education and you compare it to the policies of previous governments and the philosophy that the state and the government have a role in making sure there's a high standard of living and a high education and a high quality of life in this area, that's to say that yes, government does have a role to play. To turn around and say there is no partnership, there is no reason that this has happened, is completely erroneous.
I would say that if we continue down the right-wing road that is being prescribed by some and we start to erode the system --
Mr Carr: Like Bob Rae.
Mr Wiseman: Try Mike Harris and the not-so-commonsense revolution. You will find that if we move in the direction of the non-interventionist, non-partnership role they have in the United States, we will not be able to sustain this quality of life. We will not be able to sustain the high quality of education and health care that we have today. That's really what we want to talk about if we're going to talk about the good qualities and the reasons that Ontario is a very successful place for people to live and for them to invest and to manufacture. Sure, we have some problems, but I think we also have the best place, and a lot of investment is taking place.
I think we need to emphasize that and to emphasize that it's not an accident. It's because over the last 40 years, be they Tory, Liberal or New Democrat governments, there has been a consistent effort to maintain those standards of living for the greatest number of people and to make those decisions. For us to go off that track now and go down in another direction, a republican, right-wing, monetarist direction, will erode the standard of living we have created. So to say that the investment at Ford is somehow not related to that I think is a huge misinterpretation of what has actually happened in our society in the last 40 years.
Mr O'Connor: I appreciate having a chance to participate in this part of the discussion, because for my fellow committee members who do know, I worked for a dozen years in the auto sector at General Motors in Oshawa. I'll tell you, it's the workforce there that really does have the biggest impact on whether or not the cars are going to remain to be built in the auto plants.
At the same time, our dollar has a huge impact. Our health care system here has a lion's share of the impact. If we go back and take a look at the medicare program, at health care, workers like the Steelworkers up in Sault Ste Marie sat down with the employers and said, "Let's come up with a community health centre and let's start looking at some universal care for our workers." That predates medicare and ends up being part of the infrastructure that we can all be proud of and that all governments have had a play in. I wouldn't want to take away the fact of who was the government when medicare came in, when expansions took place and improvements took place, because every government had a hand in that.
The CAW talked about things like wage protection, and it was this government that brought in wage protection in plant closures. The CAW talked for a long time about establishing an Ontario Training and Adjustment Board -- maybe they didn't call it that -- to make sure that you've got not only employers and educators but workers involved in decisions around future training and adjustment processes.
I thank Mr Carr for suggesting it, but at the same time, labour wants to be involved with the government in expanding and changing and being part of the society as we do go on and as the times change. The PCs are saying they're going to scrap the labour legislation. It's fine for them to say that. That's what happens in politics. The next government has a chance to come in and make changes that could be on a very negative side, to take away from the benefits that have been extended to residents of the province.
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But there is a good deal of responsibility that's being shared and it just doesn't go to one group alone. I thank Mr Carr for finally recognizing the role the workers have. Back in the late 1930s in Oshawa, where I come from -- it's certainly well recorded in the history books that back when the Liberals were under the rule of Mitch Hepburn they said to the people to end the strikes. The mayor of Oshawa said, "You're not getting off the train," and sent them right back into Toronto again. That was the beginnings of the UAW coming and taking a very strong hold in the auto sector, and today we've got the CAW, where they have the opportunity to have a say, a greater say now than they had in the past, and they want to have a continued say.
At times, I'll certainly agree, they don't agree with the government. There are probably a lot of times when Buzz Hargrove and I haven't agreed, and there will be times in the future when Buzz Hargrove and I don't agree.
I think the suggestion that's made is certainly important, but let's not overlook the role that everybody plays in this.
Mr Kwinter: I'd like to just set the record straight on the role of government and the role of the workers and the role of the other competitive advantages. As the minister involved at the time the Ford decision was made -- you should know we have a history in Ontario.
To give you an example, while I was the minister, Honda in Japan asked for two cars to be taken off the production line in Alliston -- nothing special; at random -- and sent back to Japan. They went to Marysville, Ohio, the major facility for Honda in the United States, and said: "Take two cars off. Send them back to Japan." They went to the Japanese plant, "Take two cars off." These were all Honda Accords. They evaluated them in terms of finish, tolerances, everything, and decided the two best Honda Accords built in the world were built in Alliston. As to Toyota in Cambridge, I heard from the president of Toyota at the time that dealers in California were specifying on their orders that they wanted Cambridge Corollas because of the finishes, because of the quality. I spoke to the president of Camry at the opening of the Camry plant. He told me their experience is exactly the same.
There's no question that the reason a lot of these things are happening is because of the quality of the workforce, but it isn't just that. That's a very important feature. I think you have to be careful that you don't get confused at what is happening.
The other situation, and just to recount what happened at Ford so you'll know -- and I'm sure some of you may know -- Ford Motor Co was looking to expand a van plant. There were two facilities that were competing. One of them was in St Louis, Missouri, and the other one was in Oakville, and it was an intercompany competition. It wasn't a matter of deciding, "Where are we going to go?" It was a decision about, "Do we expand in Oakville or do we expand in St Louis?"
I was approached by the executives at Ford: "We don't need the government of Ontario to give Ford Motor Co money" -- and that's one of the biggest concerns people have, why are we giving money to these huge corporations -- "but we have to be on a level playing field in order to attract business, and one of our problems is that in order to be able to attract this facility, we need infrastructure upgrading and we need training. That infrastructure upgrade is going to benefit all the industries in the Oakville area, as is the training, because we don't have a lock on our employees; they come, they go, and their skills are transferable. But if we're going to compete, we have to be able to have that provided, because if we have to absorb that, we are no longer competitive with the St Louis, Missouri, pitch to the board of directors of Ford."
That amount -- I can't remember the exact -- I think was $102 million the provincial government had to come up with. That was a big number, and we had to make a decision: Is that something that we, as shepherds of the taxpayers' money, should be allocating? I felt it was, I was successful in selling it to my cabinet colleagues, and we agreed to make that contribution. That didn't guarantee we were going to get it, because we were still competing, but as a result of that and all the other factors you mentioned, plus a major factor, our proximity to the market, the fact that we're in a very, very favourable location, we were successful in getting it. By getting it, we anchored the Ford Motor Co in Oakville, because now they've put this huge paint plant in as well as the van plant.
So that is the positive side, and there is a role for government to play. Without the government doing that, we would have lost it because St Louis, Missouri, would have had a better picture to sell to their executives.
Having said that, the problem is that because the automotive sector is booming right now, there is a feeling that everything is well in Ontario and, "Look at all the investment," and we had the Treasurer show us this huge capital investment by the automotive sector. That investment is being made for one reason only, that the market is booming and they have a huge investment already here, and this is add-on investment to protect the investment they have and to service the market currently requiring their products.
What we don't see in those figures, and this to me is the telling figure, are the companies that are not coming here. I can tell you, and I've mentioned this once before in the committee, BMW and Mercedes have huge facilities that are planned. I'm sure you know that the Premier made a pitch to try to get one of them. We weren't even on the short list. We weren't even on the long list.
Those are some of the problems we have. A lot of the investment going on in Ontario is there because it's add-on investment. We don't see any greenfield investment other than the stuff that is there because they've got the critical mass and it makes eminent sense to add on to it. But I'll tell you, if the auto sector turns down, other factors are going to come into it. You've seen what's happened. You've seen what's happened in St Catharines, you've seen what's happened in other areas. It's a problem.
What we have to do is to make sure we are cognizant that we are in a globally competitive situation, and we have to make sure that all of our competitive and comparative advantages are there. That has to do with legislation, it has to do with taxation, it has to do with all the things that go into the mix.
I'll just give you one last bit of information, that was quite telling for me. The other day I had a meeting with UPS, and UPS is the famous case that just happened last month, where they are moving out of Ontario their particular telephone facility and are going to New Brunswick. I met with their public relations man and he showed me the figures, and it was quite interesting. What has happened is that there is a total change in the way business is being done. With the new telecommunications technology, those places can be anywhere. They can be in Iceland, they can be anywhere in the world that they have a link. It doesn't matter. So what happens is that it's a whole new parameter.
I'll give you one interesting thing. They went to the WCB when they were trying to decide where to go, and the WCB rate for their particular industry was $3.28. They went to New Brunswick and the rate was 22 cents. I mean, $3.28 to 22 cents. They went and looked at the cost of real estate. They went to look at the cost of living. They went to see the educational system. For example, one of the determinants is that they needed a bilingual workforce. There are lots of bilingual people in Toronto, but they don't have the ability to get them all together because there are so many other opportunities for them. So all these things are out there.
At the end of the day they said the labour legislation -- they had a list, and I have the list actually with me. They had a list of about 10 determinants, and they said not one of them was the major determinant, but given all of them cumulatively, there was no question about where they were going. Again, they had a short list, and I think Welland may have been on the short list. But they said there was no question about it, and they're gone. And not only are they gone, but they told me that Xerox is there and all these people are there.
The interesting thing about it is that New Brunswick hasn't got a lock on the technology. It isn't that suddenly New Brunswick has invented this incredible telecommunications technology. It's available to anybody. But it's all the other things, and those are things that we have to be cognizant of. UPS will never move their trucks out of Ontario because this is where their customers are, but when it comes to these kinds of activities where you no longer have to be in a particular location because of our huge advances in telecommunications, we are going to be really in a competitive situation and you're going to see more and more of that kind of activity go somewhere else, because we're pricing ourselves, we're regulating ourselves and we're legislating ourselves out of competition. Sorry for the soapbox.
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Mr Carr: I thought we were going to have something simple that we'd get a consensus on. I guess we don't. Elaine, do you have any questions on this section, so we can proceed?
Ms Campbell: I guess I'll repeat what I said earlier. The issue as I saw it after this morning's discussion was whether or not to have a discussion of specific sectors or incorporate the general comments made by the sectoral representatives under "Economic and Fiscal Policies."
Another issue that I failed to mention a few minutes ago was that there was some concern expressed this morning about the fact that the sectors that did make presentations to the committee were by no means an inclusive list of all sectors within the Ontario economy. Would the committee like a reference to that fact in an introductory paragraph, if it's decided to have a sectoral issues section, saying that the committee recognizes that the groups that did make presentations to the committee by no means represented the entire spectrum of the Ontario economy, that they are a representative sample?
Interjections: Yes.
Ms Campbell: But is the committee still interested in having discussions of the concerns raised by each of the sectoral groups?
Mrs Haslam: To some extent, yes.
Mr Phillips: We're already through the As.
Ms Campbell: So we'll deal with the specific concerns under each of the sectoral headings and then try to incorporate general concerns under "Economic and Fiscal Policies"?
Mr Sutherland: Yes. I just wanted to make a couple of comments. I believe we had some of the financial services sector in here and I wasn't sure where under "Sectoral Issues" -- the bankers' association was in; the insurance bureau sent a formal brief, so we probably should include that as a sector. I want to add that.
I just want to make one other comment with respect to what Monte said about UPS. Prime Time News had a very excellent thing on Mr McKenna the other night, about what is going on in New Brunswick. He noted workers' comp rates and the difference, particularly in the call centre. The Prime Time News segment stated clearly that what New Brunswick has done is decided that, "In that sector we're going to reduce the comp rates." In effect, the rest of the industries are subsidizing that sector for the very low comp rates being provided in that sector, because the New Brunswick government has said: "That specific sector is a very high priority for us. We want to have a lot of the call centres there," and made a deliberate choice to lower the comp rates in the call centre to a significantly low, low amount. It isn't the case, in all the other sectors, that you'd find that much of a difference in their rates. I think that's an important point to add to that discussion. They've made a very conscious decision to do that for call centres, and it is a big difference, there's no doubt about it.
It's also important to note, though, that in Ontario we have attracted a lot of new call centres in spite of all that. As a matter of fact, I understand the stats are that the new jobs we've attracted in the last few years are larger than the entire call centre industry in the province of New Brunswick.
Mr Kwinter: Mr Chairman, could I just interject for one minute? I think it's important. You should know that the key to the workers' compensation issue in New Brunswick was that UPS and other companies have said that what they do is apply the rate on their total company.
They have no quarrel that if a guy is delivering parcels by truck and he's got a 100-pound parcel, he can wrench his back, he can do everything else. What they're saying is that it was $3.28 across the board, and: "That doesn't make any sense. Our people who are on telephones may drop a telephone on their foot or something, but the chance of their getting the same kind of injury frequency and rating as the rest of our employees doesn't make any sense. They may have some kind of metacarpal" whatever. They said, "We want you to separate out of our operation so that we don't get classified in that higher rating because of our drivers and the people who are delivering that stuff," and use a rate they felt was more reasonable for those people on the telephones. And that's what they did. It was an accommodation. Whether it's some other sector subsidizing or not, that was a major determinant.
Mr Wiseman: They've got their high-risk people in Ontario and New Brunswick got the low-risk people.
Mrs Caplan: Don't be silly.
Mr Phillips: It's tough to deliver Ontario packages in New Brunswick.
The Chair: If we could have some order, we'll continue.
Mrs Haslam: For Elaine, I was the one who raised the financial-banking under "Sectoral Issues." It's listed under foreign and domestic loans. There were certain recommendations in there and certain priorities held that I felt were very, very viable in this document, and I just wanted to be sure it was handled under "Sectoral Issues."
The Chair: If there are no other concerns with respect to "Sectoral Issues," we'll turn it over to Ms Campbell and continue with "Social Issues."
Ms Campbell: The next area is "Social Issues." The committee heard from several social service providers and recipients. The summary you received with the proposed outline divided those particular organizations' and groups' recommendations into a number of subheadings. The members may wish to discuss social issues in the context of each of these subheadings, or they may wish to have a general discussion of the many themes that arose during the course of the presentations.
At the top of page 4 is a list of some of the themes that arose during those particular presentations. Members of the committee may have others they wish to have considered.
The Chair: With respect to "Social Issues," comments from committee members?
Mrs Haslam: It's fine.
Mr Sutherland: It's fine.
Mrs Caplan: Perhaps you could go back and check this, Elaine. Under "partnerships and linkages," and then the next one, "the need for a continuum of care," we heard from several presenters about the need to develop a true systems approach. I think that's different from just linkages or continuum, so I thought you might want to differentiate. There were a couple of presenters, but the one from the centres of excellence talked about the need to develop a systems approach, the sharing of information and all of that. I think that's a very important policy approach that should be identified under some of the subheadings and common themes.
Ms Campbell: Do I take it then that the committee would prefer to have a discussion dealing with themes, as opposed to the particular segments who made presentations to the committee?
Mrs Caplan: It seems to me that if we deal with the themes, what you see are the things that affect all of those, and if there are any that are specific and don't fit within those themes, we can identify them. But as we said we would identify that concern, it might be interesting to point out in the margin, if you will, the organizations that had that same concern. There were repetitive themes through all of the social service sectors and I think it's quite interesting to see how they come together in that way.
Ms Campbell: I did have one question under this particular area. Some of the members may have noticed that in the summary that was distributed yesterday, under "Social Issues" there was a general category entitled "Health." There would be a lot of overlap between the concerns that were raised under that heading, "Health," and "Hospitals" under "Transfer Recipients." The members may wish to consider discussing health issues with hospitals under "Transfer Recipients" when we get to that section.
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Mrs Caplan: In fact, I think most people would agree that hospitals are a component of the health sector, but we also heard some arguments that social services equally are a part of the determinants of health, as are other --
Mrs Haslam: Housing and jobs.
Mrs Caplan: That's right: housing, jobs. We know how important the right mix of all of those components is to an individual's health, so it might be more appropriate to deal with transfer recipients and the notion that hospitals are a segment of the health transfer payment.
Mr Carr: Just from my standpoint, I like the way they're listed in the table of contents there, with the "Social Issues" and the "Transfer Recipients"; I think Elaine also even did it under the transfer recipients. She's got it in alphabetical order, like MUSH, like we call them, with municipalities first, universities, schools and then hospitals last. So I think the way it's done is perfect there.
Mrs Caplan: In fact, the transfer recipients are different because hospitals are a transfer partner, a transfer agency, of the Ministry of Health, but there are many programs in the social service sector that also receive what is effectively a transfer from government but are not considered a transfer agency under the MUSH heading. I think it's important to differentiate between the two, particularly when you're talking about a sector, I guess. So if it could be clarified that hospitals are a transfer agency but they are just one component of the Ministry of Health --
Mrs Haslam: Or the health sector.
Mrs Caplan: Or the health sector.
Mrs Haslam: They are one part of the health sector.
Mrs Caplan: They're just one part of the health sector, that's right. An important part, I'd add.
Mrs Haslam: But so are companies that manufacture health implements to export. They're also part of the health sector. It's multipurpose.
Mrs Caplan: That's right. Providers of assistive devices, the drug companies. Certainly the professional organizations, and we heard from several of them. I think to ignore the Ontario Nurses' Association or the Ontario Medical Association in your discussion of health because you were talking hospitals would be absolutely inappropriate.
Mrs Haslam: Absolutely. I agree.
The Chair: If there are no further comments with respect to the social issues, then we'll continue with "Transfer Recipients."
Mrs Caplan: I thought we did that.
The Chair: No, we just did "Social Issues," and we're now dealing with "Transfer Recipients." Indeed, there are overlaps among many of these headings, as we've all come to understand. However, with respect to transfer recipients, Ms Campbell?
Ms Campbell: I had some questions or issues to be resolved under the heading "Transfer Recipients." The MUSH sector representatives came from a variety of areas of activity, but there were several common themes that emerged during their presentation. We've listed some of those there: the need for stable and predictable funding, federal transfers, the social contract, the need to keep abreast of new technology and the need to respond to demographic changes.
My question is, do the members wish to discuss the MUSH sector in terms of common themes or do they wish to examine them individually, with perhaps an introductory paragraph making reference to common themes?
Mr Sutherland: I guess maybe both in some ways. I think the common themes need to be elaborated upon, though. I don't know if we can just do that in one paragraph.
The major changes: the one other issue that I had noted is I don't know whether the title "Restructuring" is appropriate or not to put in there as another category, but that whole system of how all those agencies are going through major organizational change, governance etc, the review of all that needs to be dealt with.
So I would think under those general themes that you've outlined, and then what I would say is do the general themes first and if there are some other additional issues specific to the individual group, which I think were raised, then they should be highlighted. But I'd probably want more emphasis on the general themes and then less on the individual recipient issues.
Mr Carr: I have no problems with the ones Elaine outlined. My big concern is including in all of them the social contract, because each of them is going to be affected. The ones Elaine listed are fine with me as well. Hopefully, we wouldn't add any more, because the ones you listed I agreed to, but they weren't everyone you'd listed in the table of contents. I don't know if you had them jotted down separately; I agreed with those ones.
From my standpoint, a particular emphasis on the social contract with all the transfer recipients and what they said is going to happen at the end of that I think is a big, big problem because, as we all know, sitting around the table, whoever has to deal with that one, that's going to be extremely difficult. I think each of those transfer partners should include -- from my standpoint, the most important is the social contract, but I would agree with the other ones that you listed, Elaine.
Mrs Caplan: I also think that while there are some common themes, there are some important differences. I think the report should recognize the fact that restraint at the provincial level in the budget can have the kind of effect on municipalities and on school boards which, unless the province is careful, can result in, and frequently does, higher municipal taxes. We discussed earlier the fact that there is one taxpayer and that as an approach we are advocating -- certainly our caucus is advocating -- that there should not be tax increases at any level. Therefore, as the budget is established the province should be cautious, because they would not want to have a negative effect upon the property taxpayer.
One of the last presenters, the shopping centre owners, talked about the detrimental effect property tax is having on shopping malls across the province. Because municipalities and school boards are funded in varying degrees, not only by transfers from the province but a large portion from the property tax, I just think we should note that there are some differences between them and the universities and community colleges and hospitals which, while they may have private fund-raising endeavours, do not have the taxing ability.
The Chair: Any further comments? Ms Campbell?
Ms Campbell: I think I'm fairly clear on it.
The Chair: That, I presume then, concludes our necessary direction to Ms Campbell with respect to report writing. However, we may want to know when there will be further information coming forward from the research officers with respect to information that was compiled only this week -- earlier this week, I should say.
Ms Campbell: I had some discussion with the clerk earlier this week with respect to time frame. My question to the committee members is the date when they would like to receive the report. The committee is coming back on February 28 to begin discussions of the draft report. Would the committee like to have the report available for study over the weekend preceding that or would receiving it on the Monday before the 28th be acceptable?
Mr Kwinter: What day of the week is the 28th?
Ms Campbell: Tuesday.
Mr Wiseman: Budget day.
Mr Sutherland: Maybe. I can say this, not writing it, that if it's possible, I think, if folks could have it Friday, that would probably be good, the Friday before, to give them more time to go over what's in it, preparing for the Tuesday.
The Chair: If I could offer a suggestion. Not to be in conflict with any of the direction of the committee members, however, the report, as it will be written at that point in time, will be something that we all will have had our input into today. As we peruse that, we will only be confirming that we're in agreement with the way the report has been written. I guess from time to time research officers do work on weekends. However, if we were to have that report available to us on Monday, February 27, would that not be enough time for committee members to --
Mrs Haslam: The problem with that is that some of us are farther away from Toronto than others.
Mr Wiseman: UPS delivers.
Mrs Haslam: Yes, but one little glitch and I don't get it till late on Monday night, and if I'm not even in Toronto, then I don't get it till Tuesday morning. I don't think that's fair. I would rather have it on the Friday so I have some opportunity of receiving it in the constituency office or at least know that I have a day to get it before I end up in a committee meeting.
The Chair: Well, if it's the will of the committee that we have it on the Friday prior to our meeting on Tuesday, then we'll give that direction to Ms Campbell and wish her the best of luck.
Ms Campbell: That means that it would go to the clerk's office by noon on Thursday.
Mr Sutherland: Oh, because she has to have some time to copy? Oh, that's the problem.
Mrs Haslam: I'm not asking the impossible. I know that four days is not a lot of time. It's just that all too often when these things are distributed and they go to a Toronto office, I don't come into Toronto until it's time to come into committee, and so it could be a problem for me receiving it. That's all I'm saying.
Mr Sutherland: If it's coming to your Queen's Park office, you'd like to have it here by Friday at noon because, given what time the courier service goes out, if you're going to be in your constituency office on the Monday, they could still get it out and you'd get it Monday morning to have some time to deal with it.
The Chair: Okay, then I guess the directions are clear, that we'll expect it on Friday. It will be required by the clerk on Thursday, and that will allow Ms Campbell three days to write it.
This committee stands adjourned until Tuesday, February 28 at 10 am.
The committee adjourned at 1613.